Unlike the hockey games played in Nashville’s Bridgestone Arena, games played by the insurance industry in Tennessee are not fun to watch. Because what do special interests do when there is something they don’t like? They kill with overregulation. And, they get their friends to help them do it. In the end, consumers are the ones devoured.
As we’ve talked about before on this blog, insurance companies do not like legal funding because it provides everyday people an alternative to taking unfair, low-ball offers made by insurance companies after an accident. Everyone has a story if it happening a friend, a family member, a neighbor. They are in an accident, out of work, and insurance delays any offer. Then when insurance thinks they are really hurting, they come in with low offer far below what they know they should pay.
Legal funding is an alternative where you can get money from a potential settlement upfront and hold out for a fair offer. Insurance companies don’t like that it eliminates some of their leverage. So they are on a mission to eliminate legal funding.
That’s exactly what they did in Tennessee. In 2014, the insurance industry and their allies pushed legislation through the General Assembly that that drove almost every provider out of state due to overregulation—eliminating the marketplace for consumers who need it.
This week, a bill died in sub-committee that would have been a first step to getting providers to open up access to legal funding in the state. But the special interests wouldn’t let the happen, and killed the bill.
State Farm Insurance, the largest provider of auto insurance in the country, testified in the Tennessee sub-committee against the common-sense rollback of overregulation. In part of the testimony, they spoke against the use of arbitration, which they use in their own contracts, as well as other commonplace business-smart changes that would make it easier for legal funding providers to operate.
The National Association of Mutual Insurance Companies, predictably, also testified against the use of arbitration, though they operate their own arbitration service for their members. They arbitrate disputes for their insurance company members regarding damage to motor vehicles, medical payments, and other claims.
The hypocrisy is hard to watch. But it’s even harder knowing that legal funding providers are getting calls every day from people in Tennessee that need an option. Everyday people who are unwitting players in the insurance industry’s game. Everyday people are the ones who suffer.