Tennessee Senate Misfires on Legislation Aimed at Eliminating the Business of Consumer Legal Funding.
Yesterday the Tennessee Senate passed SB-1360, a bill that if enacted would implement devastating rate cap or price control measures on the consumer legal funding industry and begin the process of driving the business out of the state for good.
While the Senate bill was a win for out-of-state insurance conglomerates like State Farm and the Washington D.C. based U.S. Chamber of Commerce, it was a huge loss for local consumers who have relied on this important services for many years.
Consumer legal funding began doing business in Tennessee to help consumers gain a fair settlement against large insurance companies by allowing access to small amounts of funding to help pay for essential daily needs while weathering an insurance companies’ long delay tactics for settlement. These consumers, to no fault of their own, have been injured in an automobile accident, are unable to work and are without a paycheck. Consumer legal funding provides these small amounts of funding to help the consumer pay for things such as utility bills, transportation, housing and food while they wait for their settlement to be heard and finalized.
Historically, insurance corporations used a consumer’s accident and lack of financial security to force a less-than-market-rate settlement. Relying on millions of data points as to the valuation of a customer’s injury, insurance companies have no incentive to settle quickly, except for well-below established injury values. Consumer legal funding has bridged this gap by helping consumers gain an equal footing to its billion dollar foes, the insurance industry. With today’s vote however, that bridge is in serious jeopardy of collapse.
As the Tennessee House of Representatives now takes the reins on SB-1360, we hope legislators examine the dangers the bill poses to the consumer legal funding industry and their own constituents who rely on this product every day.
As always we stand at the ready to work with Tennessee legislators to enact sound policies that truly help protect all consumers just as we’ve done in states like Ohio, Nebraska and Maine. It is ridiculous to think that any legislator would want to put their name to a bill like SB-1360, a bill promoted as consumer-friendly but in truth is another profit protecting piece of legislation that favors wealthy insurance companies over everyday consumers.