All posts by Sean Kevelighan

What Florida’s Misguided Investigation Means
for Georgia Tort Reform

In an eblast to members and other stakeholders, Triple-I highlighted the growing need for tort reform in Georgia and the expanding movement in Florida threatening to undo the positive 2022 and 2023 reforms that have stabilized the Sunshine State’s insurance market and driven down prices for consumers and business owners.

March 24 marks two years since Florida Gov. Ron DeSantis signed HB 837, the second of two impactful tort reform bills tackling Florida’s lawsuit crisis that pushed the insurance market to the edge. According to National Association of Insurance Commissioners data, Florida accounted for just over 8% of U.S. homeowners insurance claims, but more than 76% of U.S. property claim lawsuits in 2019 before critical reforms were enacted. All of which is proof of a system in disarray.

A recent commentary written by Jerry Theodorou, director of the Finance, Insurance and Trade Policy Program at R Street Institute, highlighted vast improvements in Florida’s property insurance market due to legislative reform:

  •  Lawsuit filings dropped by 40% year-over-year.
  • Average home insurance premiums have decreased 5.6%.
  • 11 new property insurers entered the market.

Despite these clear signs of progress, a misguided Florida House investigation, which began last week, has been fueling misleading narratives about tort reform, just as Georgia lawmakers are considering critical legal system reforms in the Peach State.

Critics in Florida claim insurers illegally diverted funds to managing general agents and affiliates while dismissing the well-documented role of lawsuit abuse in driving up costs. This was based on a draft report about the financial operations of Florida insurers that the Florida Office of Insurance Regulation chose not to distribute because it was misleading.  

This same rhetoric is now infiltrating the Georgia Capitol in Atlanta, where some are arguing that Florida lawmakers were duped into passing reforms in 2022 and 2023. In truth, Florida’s risk crisis stems from rampant legal system abuse, a factor that has increased insurance premiums for everyone.

Even with the distorted narrative trial lawyers are inflicting on Florida lawmakers, Gov. DeSantis stated he would not support any legislation that would increase lawsuits against insurers. A recent opinion piece written by Florida insurance agent Allen McGinniss further highlights the reality of the Florida insurance market, explaining that the false narrativethat the insurance industry, not lawsuit abuse, is driving high costs for consumers “is not just inaccurate — it’s reckless.”

In Georgia, the negative rhetoric coming from neighboring Florida must not delay progress that has already been made in the 2025 General Assembly to put an end to legal system abuse in the Peach State.

Tort reform is essential to curbing lawsuit abuse, stabilizing markets, and protecting businesses and consumers in Georgia. Lawmakers cannot fall for the same tactics the trial bar in Florida designed to stall much-needed legal system reforms for many years. Following passage by the Georgia Senate, the House must act now to pass these crucial tort reform bills and send them to Georgia Gov. Brian Kemp’s desk to sign into law.

Both Florida and Georgia are at a pivotal moment in civil justice reform. Legal system abuse has generated increased insurance costs in both states, fueling social inflation and placing a heavier financial burden on families and business owners. The stakes are too high to let trial lawyers and bad actors manipulate legislators into reversing progress or blocking much-needed reforms.

Florida lawmakers must stay the course to ensure the successful legal reforms over the past few years remain intact, while Georgia legislators must seize this opportunity to pass meaningful legal system changes. These actions are essential to decreasing lawsuit abuse, stabilizing insurance markets, and protecting consumers and businesses from rising costs.

Go deeper:

  • For more in-depth analysis on legal system abuse and social inflation, visit Triple-I’s knowledge hub and StopLegalSystemAbuse.org microsite.
  • Discover more about the impact of legal system abuse in Florida and Georgia by reading Triple-I’s latest Florida and Georgia Issues Briefs.

California Insurance Market at a Critical Juncture

Guest column by Sean Kevelighan, Chief Executive Officer of the Insurance Information Institute, published in the Ventura County Star.

As catastrophic wildfires blaze through Southern California, the human toll is heartbreaking, and the financial aftermath is staggering. For the millions impacted, the first step is safety. But as the flames subside, families will turn to insurers — California’s financial first responders — for recovery and rebuilding. Yet, even as insurers deliver on their promise to customers, the state’s insurance market continues to face headwinds.

The truth is, California’s insurance system has been in crisis for years. Wildfires are burning through not only our forests and communities but also the fragile foundation of an insurance market that has struggled under decades-old regulations.

Recent reforms, including the long-awaited “Sustainable Insurance Strategy,” are a step in the right direction. With implementation beginning in 2025, the new strategy poses a potential to fix the troubles of the past and rebuild with a more robust, sustainable and insurable market after what may be the worst wildfires in California’s history. However, there is some damage done that we need to overcome.

For years, insurers have sounded the alarm. They have warned policymakers about the urgent need to modernize regulations so the system can function in the face of increasing climate risks. But change has been slow, and the consequences are now clear.

Some insurers have made the difficult decision to stop writing policies in California or leave the market entirely. These companies do not want to abandon the state — California is the largest insurance market in the U.S. and one of the largest economies in the world. But without the ability to manage and price risk effectively, their hands are tied.

For decades, California has not allowed insurers to model future catastrophic risks, such as wildfires, for pricing purposes. Additionally, rate increases above 7% have been subjected to an arduous approval process, forcing insurers to submit not actuarially sound rates capped at 6.9%. Meanwhile, the costs of claims have skyrocketed. Between 2019 and 2022, inflation drove homeowners’ replacement costs up by a cumulative 55% nationally. When inflation is paired with worsening wildfire risks year after year, the math simply does not add up.

One of the biggest lessons from California’s risk crisis is the need for collective action. The rising frequency and severity of wildfires demand a united effort to build resilience. While preventative measures like brush clearing and fireproofing homes are helpful, they are not enough when wildfires of this magnitude strike. It is clear we need large-scale solutions, including investments in fire prevention, smarter land-use planning and policies that incentivize sustainable development.

It is disheartening that it often takes a major catastrophe to spur action. But this is California’s opportunity to address the root causes of this crisis. A resilient future requires modernizing our insurance market, adopting climate-conscious policies, and committing to long-term investments in disaster prevention and recovery.

Insurers want to serve Californians, and they want to be in California. But without systemic changes, the cycle of crisis will only continue. This is not just about insurance — it is about protecting our homes, our communities and the state from the growing risks of a changing climate. The time to act is now, before the next disaster strikes.

Who’s Financing Legal System Abuse? Louisianans Need to Know

Legal system abuse in Louisiana costs every one of its citizens more than $1,100 annually, according to the American Tort Reform Association (ATRA). The state’s litigation environment was also cited by the Insurance Research Council (IRC) when reporting how Louisiana is the least affordable U.S. state for both auto and homeowners insurance. And then there’s shadowed Third-Party Litigation Financing (TPLF) continuing to sneak its way into this costly conundrum, with virtually no one understanding who’s behind it and what ulterior motives they may have.

Louisiana’s state lawmakers passed a measure (Senate Bill 196) last year aimed at reducing legal system abuse and litigation costs, but the measure was vetoed by former Governor John Bel Edwards.  The Litigation Financing Disclosure and Security Protection Act would have required plaintiffs to disclose whether their legal fees were being financed by a third-party with no obvious stake in the civil court case’s outcome, other than financial gain, or even worse foreign manipulation of America’s legal system.

Third-party litigation financing (TPLF), a multi-billion-dollar asset class which provides the financial resources for plaintiffs to file lawsuits, is growing exponentially because the U.S. legal system has increasingly become a place to secure huge paydays. Much like other shadowed banking tactics, financiers prefer to stay anonymous to avert regulatory scrutiny. However, beyond the financial gains, evidence is pointing toward foreign, even tax-free sovereign investments footing the bills.

Louisiana’s own U.S. House Speaker Mike Johnson (R-LA) is keenly aware of the potentially problematic foreign investment issues of TPLF, introducing federal legislation weeks before his recent election and being handed the leadership gavel. If passed into law, The Protecting Our Courts from Foreign Manipulation Act would stop foreign entities and governments from financing litigation in U.S. courts and shine a light on a shadowy part of this nation’s legal system. Similar legislation was introduced in the U.S. Senate and co-authored by another Louisianan, Senator John Kennedy (R-LA).

Much as Louisiana’s federal elected officials are working to address issues involving legal system abuse, such as TPLF, the State of Louisiana will benefit more directly by focusing on what’s happening in its own back yard. There is a simple formula to what combining increased climate risk with legal system abuse does – it creates a crisis in terms of affordability and availability of insurance.

The price of insurance is the effect of increased risk, not the cause. Louisiana’s high legal costs are driving up prices on virtually all goods and services for its citizens. Taking important steps toward litigation (and litigation financing) reform should be a top consideration in 2024.

A condensed version of this op-ed was published as a letter to the editor by Triple-I CEO Sean Kevelighan in February 2024 in The Baton Rouge Advocate and the New Orleans Times-Picayune.