The American Property Casualty Insurance Association (APCIA) has expressed strong support for the Protecting Our Courts from Foreign Manipulation Act, introduced by Sen. John Kennedy (R-La.) (pictured, left).
The legislation is aimed at safeguarding the integrity of the US civil justice system and protecting national security, as the House companion bill, or H.R. 2675, sponsored by Rep. Ben Cline (R-Va.) (pictured, right), recently advanced out of the House Judiciary Committee.
Third-party litigation funding (TPLF) has evolved into a multi-billion-dollar industry that often operates without transparency. Foreign entities, including governments and sovereign wealth funds, can finance lawsuits in US courts, creating potential risks for national security, intellectual property and civil justice fairness.
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For insurers, these arrangements carry specific implications. Foreign-backed litigation can increase liability exposures, drive up claims costs, and introduce legal uncertainty, affecting both underwriting and risk management practices. Insurers could face unexpected claims from complex, high-value lawsuits, potentially impacting loss ratios, reinsurance arrangements, and the pricing of policies.
The proposed legislation would prohibit foreign governments and sovereign wealth funds from financing US litigation. It would also require disclosure of foreign funding sources and litigation agreements to both courts and the Department of Justice, while mandating oversight and reporting by the DOJ's National Security Division to track foreign involvement in civil cases.
Sam Whitfield, APCIA’s senior vice president of federal government relations and political engagement, stated that foreign-backed litigation represents a clear and present risk not only to national security and economic stability but also to insurers, who may be forced to absorb unforeseen liabilities or defend against unpredictable legal claims. Whitfield emphasized that swift passage of the reforms is necessary to protect consumers, insurers, and the broader financial system.
APCIA, as the primary national trade association representing home, auto, and business insurers, promotes private competition and a stable insurance marketplace.
With TPLF growth showing no signs of slowing, APCIA’s backing of the bill highlights the insurance sector’s interest in ensuring a fair, transparent, and secure legal environment, directly influencing the stability and resilience of the US insurance market.
