What's Happening?
Recent legislative changes in Southeastern U.S. states are set to impact the property and casualty insurance sector significantly. In Georgia, Senate Bill 69 introduces new restrictions on third-party
litigation financing, a practice that has been a growing concern for insurers. This law mandates financiers to register with the state Department of Banking and Finance and disclose affiliations with foreign interests. It also prohibits funders from making legal decisions regarding attorney representation and settlements, and requires disclosure of litigation financing agreements during discovery. Additionally, the law specifies that the failure to wear a seat belt cannot be used as a basis for insurance cancellation or rate increases. In Florida, Senate Bill 655 requires pet insurance providers to clarify policy details and claims denials. Dexter’s Law mandates the Florida Department of Law Enforcement to maintain a list of individuals convicted of animal cruelty, potentially aiding in dog-attack lawsuits. South Carolina has revised its liquor liability law, reducing coverage requirements for establishments where alcohol sales are less than 40% of total sales, and limiting liability for businesses found less than 50% at fault.
Why It's Important?
These legislative changes could have significant implications for the insurance industry and businesses in the Southeastern U.S. The restrictions on litigation funding in Georgia aim to address concerns about the influence of third-party financiers on legal proceedings, potentially reducing frivolous lawsuits and stabilizing insurance costs. The changes in South Carolina's liquor liability law may alleviate financial pressures on bars and restaurants, potentially preventing closures due to high insurance premiums. Florida's new requirements for pet insurance transparency and the public listing of animal cruelty offenders could enhance consumer protection and accountability. These laws reflect a broader trend of states attempting to balance consumer protection with business interests, potentially influencing similar legislative efforts in other regions.
What's Next?
As these laws take effect, businesses and insurers in the affected states will need to adapt to the new regulatory environment. Insurers may need to adjust their policies and practices to comply with the new requirements, particularly in terms of litigation financing and liability coverage. Businesses, especially those in the hospitality sector, may benefit from reduced insurance costs, but will need to ensure compliance with the new training and operational requirements. The impact of these changes will likely be monitored closely by stakeholders, including legal professionals, insurers, and consumer advocacy groups, to assess their effectiveness and potential need for further adjustments.
