Insurers Probe Opacity of U.S. TPLF Contracts
Gen Re has published a white-paper warning casualty carriers that “stealth capital” behind many U.S. lawsuits is complicating claims evaluation and settlement strategy. Drawing on recent state reforms in Georgia, Indiana and West Virginia, the authors urge adjusters to demand early disclosure of funding agreements, nail down who controls litigation decisions, and model “loss-amplification” where funder ROI targets distort settlement ranges.
The report flags a surge of bespoke contracts—some tying funder exit multiples to milestone events, others granting veto rights over settlement—placing traditional bad-faith calculations at risk. It also cites emerging defense tactics: subpoenaing funder communications after privilege waivers, and leveraging new civil-procedure rules that compel funding disclosure in federal mass-torts.
For legal-finance shops, the memo is a reminder that the insurance lobby is mapping counter-measures in real time. Expect more discovery fights over work-product doctrine and, potentially, higher re-insurer premiums priced into portfolios that contain funded claims.