The Council of Insurance Agents & Brokers issued its 2026 key issues position paper on April 1, calling for tort reform at both state and federal levels and advocating for increased transparency in third-party litigation funding. The organization also urged the closure of related tax loopholes to address legal system abuse and reduce insurance costs.
The position paper highlights concerns about how outside investors finance lawsuits in exchange for a share of any recovery, noting that the lack of disclosure prevents insurers from accurately assessing risk. It references specific federal bills, including the Litigation Transparency Act of 2025, which would require early disclosure of funding agreements in civil cases, according to The Council of Insurance Agents & Brokers.
Industry data compiled by The Council of Insurance Agents & Brokers shows that insurers spend more than 23 billion dollars annually on defense and cost containment. Third-party bodily injury claims reached an average indemnity payment of 27,000 dollars per injured party, representing an 8.3 percent increase since 2023 and a 38 percent increase since 2020. These trends place added pressure on commercial property and casualty markets in states without strong tort protections and raise premiums for businesses and consumers regionally.
A report by The Perryman Group found that third-party litigation funding imposes a 54.2 billion dollar annual drag on the U.S. economy due to higher legal costs, increased insurance premiums, and reduced business investment. When including multiplier effects, the total impact affects approximately 454,450 jobs nationwide. Consumers ultimately bear these costs through higher prices for goods and services as businesses pass along the added expenses.
The Council of Insurance Agents & Brokers represents leading commercial insurance and employee benefits intermediaries in the United States. Its members place approximately 90 percent of U.S. commercial property and casualty premiums and 70 percent of employee benefits business. The organization was founded more than a century ago and actively engages in federal and state policy discussions to promote stable insurance markets and fair civil justice practices.
