Insurance Industry Wrote North Carolina's Litigation Funding Ban, Records Show

A coalition of insurers, industry-funded think tanks, and a fraud-investigation nonprofit whose members are insurance companies successfully lobbied for a law that bans plaintiffs' outside...

North Carolina has enacted what specialty medical malpractice insurer ProAssurance Corporation — a Birmingham, Alabama-based NYSE-listed holding company with a direct financial stake in suppressing large malpractice payouts — has publicly celebrated as a first-in-the-nation statutory ban on third-party litigation funding. That a company whose profitability depends on minimizing plaintiff recoveries is the loudest champion of a law restricting plaintiff financing is not a coincidence. It is the story.

The law, described in detail by the Consumer Finance Monitor (Ballard Spahr LLP, June 26, 2026), prohibits external investors from advancing money to plaintiffs in exchange for a contingent share of any judgment or settlement. What it does not prohibit — by explicit statutory carve-out — is insurance defense and indemnification obligations. In plain English: the law bans third-party litigation financing for plaintiffs while constitutionally protecting the functionally identical practice when insurance companies finance defendants. The North Carolina legislature did not stumble into this asymmetry. It was architecturally designed into the exemption structure. The bill number, primary sponsor, committee votes, floor votes, and governor's signature date are not present in the public intelligence available to this publication at press time — those gaps represent the first thing a Senate subcommittee or state legislative auditor should demand.

The intellectual infrastructure for this outcome was constructed over years by organizations whose funding flows directly from the insurance industry. The Insurance Information Institute — a 501(c)(6) trade association whose board and membership historically includes State Farm, Allstate, Liberty Mutual, Travelers, Hartford, Chubb, and AIG — published a white paper as early as July 27, 2022, framing litigation finance as 'a cash fountain within the alternative investment space where there is less regulation and more speculative investors.' The paper's author is not publicly identified in available records. Triple-I does not disclose its member dues structure. Its IRS Form 990 filings, which would reveal total revenue and top funding sources, have not been incorporated into any public legislative record associated with the North Carolina ban.

The American Tort Reform Association, a 501(c)(6) founded in 1986 whose historical donor base spans major insurers, pharmaceutical manufacturers, and the U.S. Chamber of Commerce ecosystem, anchors the economic case for the ban with figures it attributes to a 2026 report: $35.8 billion in direct annual losses, $54.2 billion in gross product impact, 454,450 jobs, and $193 per person in consumer costs. The author, commissioning entity, methodology, and publisher of that 2026 report are not identified in any source material available to this publication. The use of 'multiplier effects' to convert litigation costs into gross product and employment figures is a standard technique in advocacy-commissioned research — it systematically excludes the economic benefits of plaintiff compensation and treats every dollar of litigation expense as a pure economic loss. ATRA does not publicly disclose its donors. Its North Carolina lobbying registration filings and any direct financial relationship with the legislators who sponsored the TPLF ban remain unexamined in the public record.

The Medical Professional Liability Association — formerly the Physician Insurers Association of America, the trade group for medical malpractice insurers — published a Winter 2025 article in its journal Inside Medical Liability arguing for sweeping TPLF prohibition on grounds that the practice gives plaintiffs 'a structural advantage over physicians, healthcare professionals, hospitals, insurers, and other stakeholders.' The same article acknowledges that TPLF 'is not a big factor in MPL today.' The industry is not responding to documented present-tense harm. It is eliminating a plaintiff financing mechanism before it scales. MPL Association's member company list, dues revenue, and North Carolina lobbying activity are not reflected in any public legislative record attached to the ban.

At the federal level, Senator Chuck Grassley (R-IA), Chairman of the Senate Judiciary Committee, has introduced the Litigation Funding Transparency Act, requiring disclosure of TPLF agreements in class actions and multidistrict litigation. His bill was publicly endorsed by David J. Glawe, President and CEO of the National Insurance Crime Bureau. NICB describes itself as a nonprofit that 'receives support from property-casualty insurance companies' — virtually every major P&C carrier in the United States funds it. NICB's CEO endorsing legislation that advances those same carriers' preferred policy position while presenting as a neutral fraud-fighting institution is a regulatory advocacy technique with a long history: industry preference laundered through a quasi-law-enforcement institutional voice. NICB's specific member company list, annual budget, dues structure, and any direct coordination with Grassley's office on the bill's drafting are not in the public record.

What is documented is the loop: ProAssurance profits from suppressing malpractice payouts and publicly celebrates the ban. Triple-I, funded by major carriers, provided the white paper framing. ATRA, funded by insurers and manufacturers, provided the economic numbers. MPL Association, representing malpractice insurers, provided the medical liability narrative. NICB, funded by P&C carriers, provided the fraud-fighting endorsement for the federal companion bill. Every node in this network has a direct financial interest in the outcome the North Carolina law produces. Every dollar of claimed public benefit traces back to a commissioned or industry-produced source. No independent, peer-reviewed economic analysis of TPLF's net effect on North Carolina plaintiffs, on case resolution rates, or on access to justice for litigants without resources appears in any legislative record available to this publication.

What remains hidden is substantial. The North Carolina bill's primary sponsors, their campaign contribution records from insurance-sector PACs, and the lobbyist registration filings associated with the bill's passage are available through the North Carolina State Board of Elections campaign finance database and the North Carolina Secretary of State's lobbyist registration system — and have not been entered into any public legislative record examined for this report. ATRA's IRS Form 990, MPL Association's Form 990, and NICB's Form 990 would reveal the precise financial relationships connecting these organizations to each other and to the legislators whose votes enacted the ban. A Senate Judiciary subcommittee hearing — with subpoena authority over those 990 filings, lobbyist communications, and the methodology behind the $35.8 billion loss figure — is the instrument that would close these gaps.