SAN FRANCISCO, Dec. 16, 2014 /PRNewswire/ -- After three and a half years of exhaustive deliberations and vigorous debate, state legislators convening for the 2014 Annual Meeting of the National Conference of Insurance Legislators (NCOIL) in San Francisco determined not to endorse any model legislation pertaining to consumer legal funding.
The Alliance for Responsible Consumer Legal Funding (ARC) applauds the outcome, as it would have been an unprecedented effort to recommend government-mandated pricing restrictions that would directly interfere with a consumer's right to determine the best type of transaction for him or her.
"We are pleased that NCOIL rejected legislative models that would have encouraged states to limit the economic liberties of their citizens and interfere with their right to contract. Fortunately, the overt lobbying efforts of the insurance industry to deny access to this funding option for working-class consumers were rejected," said Eric Schuller, President of ARC. "Regulators have seen through this thinly veiled attempt to tilt the playing field of claims payments away from consumers and in favor of defendants liable for damages. These are encouraging steps away from the desire of giant insurance companies who want to monopolize the valuation of consumers' claims, and towards competitive market solutions that ensure anyone with a claim can access legal funding."
Effective market-based regulation of the Consumer Legal Funding industry already exists in Maine, Ohio, Nebraska and Oklahoma. Similarly, New York's attorney general has entered into an agreement to properly regulate the industry—recognizing that this product is an asset purchase, not a loan.
Despite these important precedents, the Tennessee legislature enacted a law earlier this year with onerous rate caps. Backed by the multibillion-dollar insurance lobby—who themselves adamantly oppose government-mandated price caps on their own products—the law forced legal funding companies out of the state and left Tennessee consumers without the option for Consumer Legal Funding.
"As legislators continue to examine how to best serve their constituents who seek consumer legal funding, they have two clear paths: One seeks economic security for families and communities in need of financing options; the other seeks to secure the status quo for insurance companies looking to maximize their profits," said Dan Cleary of Provident Litigation Funding, Inc., a Tennessee-based Consumer Legal Funding company. "The wrong path was taken in Tennessee and the impact was immediate."
"For the sake of tens of thousands of hardworking Americans who face the painful choice between paying rent, buying groceries, getting medical care or settling a claim for pennies on the dollar because insurance companies can wait them out, let's hope our elected leaders – like those represented in NCOIL - will have the wisdom to put consumers first and maintain Consumer Legal Funding as an option for those who need it," said Ralph Shayne, CEO of Oasis Legal Finance.
About the Alliance for Responsible Consumer Legal Funding (ARC)
The Alliance for Responsible Consumer Legal Funding (ARC) advocates on behalf of a coalition of legal funding providers that include the national and state level market leaders to ensure the proper regulation of the legal funding industry in the United States. ARC aims to accomplish this mission by promoting industry best practices and working at the state and federal levels with legislators and regulators to develop a framework that provides a high degree of consumer protection—including robust licensing and disclosure requirements – and protects the rights of consumers to access this economic option by embracing free market principles. www.arclegalfunding.org
Contact: Eric Schuller President ARC
SOURCE Alliance for Responsible Consumer Legal Funding (ARC)