Primary Agent - September 2026

SEPTEMBER 2026

LISA BROADBENT FROM AGENCY START-UP TO INDUSTRY ADVOCATE

EXCLUSIVE MEMBER MAGAZINE

ALSO INSIDE FIGHTING THIRD-PARTY LITIGATION FUNDING 2025 AGENTPAC CONTRIBUTORS

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SEPTEMBER 2026

CONTENTS FEATURED 8

> > > > 14

INTERVIEW WITH LISA BROADBENT Lisa Broadbent couldn’t resist independent agency ownership. In this interview, she shares how her agency grew, what accomplishment she is most proud of, and why advocacy is crucial to our industry.

WHEN LAWSUITS BECOME AN INVESTMENT STRATEGY Hear from IA&B Government Affairs Director John Savant on how third-party litigation funding is inflating insurance claims and premiums – and how IA&B and fellow agent groups are pushing back.

JOIN US ON SOCIAL MEDIA: Facebook.com/IABforME LinkedIn.com/company/IA_and_B Instagram.com/IA.and.B YouTube.com/@IA_and_B IA&B Podcasts can be found at:

IA&B is the premier resource and champion for independent insurance agents in Pennsylvania, Maryland, and Delaware.

Periodical postage paid at Mechanicsburg, PA and at additional mailing offices. Postmaster: Send address changes to Insurance Agents & Brokers, 650 Wilson Lane, Suite 200, Mechanicsburg, PA 17055.

Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2026-09, is published monthly by IA&B Service Group Inc., a subsidiary of IA&B. Copyright 2026. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and/or other professional advisors concerning specific matters before making any decisions. We disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.

MONTHLY 2 PRESIDENT'S MESSAGE 3 CLAIRE-IFICATION 4 COVERAGE CORNER 6 NEWS & NOTES 17 UPCOMING EDUCATION IABforME.com |

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PRESIDENT'S MESSAGE

A COLLECTIVE FORCE I’m writing this message on the plane, returning from a constructive conference. Every summer, the state executives from the independent insurance agent associations around the country get together to learn and collaborate. It’s always a good opportunity to take stock of how IA&B is doing, and what areas we should be exploring. It should give you some solace that around the country, 50 state associations with about 500 staff combined are working for your benefit. Here are the key areas we discussed: ▲ Mergers and acquisitions (M&A): After sharing membership data as a group, we discussed the continuing impact of M&A activity. From a high-water mark in agency sales four years ago, activity has been slowing down. In fact, we have seen a 25% decrease since 2022. While some stability in this area would be welcomed, the long-standing, local independent agency remains strong. ▲ AI impact on the independent agent channel: An entire day was spent in discussions about the impact of AI on our industry. We spoke about opportunities, and concerns, with utilizing AI in our workflows. And we discussed how we can collaborate in getting the right products to our members. ▲ Advocacy for our industry: We spoke at length about how our state advocacy efforts can best protect our members.

We all traded notes about our individual issues and how we are handling them. The big topic was third-party litigation funding, a major issue impacting verdicts and, in turn, insurance costs. Some states are having success in pushing back against this, and IA&B will now enter this fight (Read more on page 12.)

At IA&B, we rely on collaborative efforts with our colleagues to make ourselves better. This means that as members, you are assured of getting services and resources that are timely and relevant. Collectively, these associations and the 19,000 member agencies are a strong and stable force.

Onward and upward,

INSURANCE AGENTS & BROKERS 650 Wilson Lane, Suite 200 Mechanicsburg, PA 17055 191 Main Street, Annapolis, MD 21401 800-998-9644 | IABforME.com

IA&B BOARD OF DIRECTORS OFFICERS Andrew Enders, Esq. - Chair Enders | Harrisburg, PA

Kate Dawson, CISR, CPIA - Vice Chair Ferri Dawson Insurance | Murrysville, PA

MEMBERS Chelsea Clark

Erik Olsen

Tony Cusati, CIC

Lisa Parry, CPIA

Michael Gaetano

Mark Reilly

Jennifer McClure

Kent Reynolds, CIC

Michael McGroarty, Jr., CIC

David Rivell, CIC, CRM

Hunter McHugh

Christy Rose

McHugh Insurance Group Wilmington, DE

Avery Hall Insurance Salisbury, MD

Shayne McIntosh, CIC

Michael Thomas

JPI Insurance Associates Dillsburg, PA

Lighthouse Insurance Services Gambrills, MD

Jill Nye, CIC, CISR, CPIA

Kyle Zehr, CIC FIFS, LLC Telford, PA

L&W Insurance Dover, DE

Sitter Insurance LLC Erie, PA The Hartman Group Montoursville, PA Diversified Insurance Industries Hunt Valley, MD McGroarty & Bradburn Insurance Pittsburgh, PA

Gunn-Mowery, LLC Lemoyne, PA

Strickler Agency Chambersburg, PA Parry Insurance Langhorne, PA

Reilly Insurance Camp Hill, PA Blue Ridge Risk Partners LLC Hagerstown, MD Element West Chester, PA

NATIONAL DIRECTORS Jason F. Ernest President & CEO

Ashley Stafford, CPIA (IIABA) Element | Greenwood, DE Mark Monroe (IIABA) Mark J. Monroe Insurance | Downingtown, PA

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SEPTEMBER 2026

CLAIRE-IFICATION

CLAIRE-IFICATION IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR Are you a member with a question?

Contact Claire to find the answer at 717-918-9202 or ClaireP@IABforME.com.

bank is suggesting a product (IntraFi Cash Service or ICS) to handle large QUESTION: My account balances. Is it acceptable?

ANSWER: Banks often solicit agencies with new financial products. It is always a good idea to check if these products are both compatible with legal and regulatory requirements and protected by the Federal Deposit Insurance Corporation (FDIC).

First, let’s review the basics To be compliant with your fiduciary duties, your agency must maintain adequate records, i.e., 1) be able to ascertain premium funds from the agency’s books and records at any time, 2) identify the entities the funds belong to, and 3) name specific dollar amounts held for each entity on whose behalf funds are held. In addition, when placing the funds in interest-bearing accounts, the funds must be placed: ▲ in an account where no penalty can be levied against the principal for early withdrawal, and ▲ in an account insured by the U.S. Government (such as FDIC) or in instruments secured by the U.S. Government (such as U.S. Treasury bonds, bills or notes).

As a reminder, the FDIC provides protection up to $250,000 per depositor.

Now to the IntraFi/ICS product As described by the bank, the product works as follows. If an agent holds $600K in deposits from an entity: 1. The financial institution first divides that $600K into smaller amounts, each under the $250,000 FDIC maximum (e.g. three deposits of $200,000 each), Then, it places these amounts into deposit accounts at multiple FDICinsured banks that participate in the ICS program; 2. The funds remain accessible at any time from the original financial institution with which the agent is doing business; 3. Both the participating institutions and the types of accounts are FDIC-insured; and 4. No penalty for early withdrawal is associated with these accounts.

All the above elements are essential both for FDIC protection and to meet agency fiduciary obligations.

IA&B reached out to the FDIC to share their view of the product and confirm the answer. They did,

IABforME.com |

with some specific reminders. This is an abridged version (the FDIC’s full response is included in IA&B’s white paper at IABforME.com/ white-papers). In short, the product would be permissible and would not invalidate FDIC protection as long as: ▲ the agencies’ records properly account for the customers’ and the insurers’ funds (as well as the agency’s for the commission portion), and ▲ all other normal FDIC conditions listed are met (including proper designation and naming of the account as a pass-through). This is important and should not be overlooked.* Having clear records is always crucial to the FDIC since, by definition, when the FDIC is triggered, the bank is insolvent and its records may be incomplete.

The FDIC also recommends that the agency inquire of the financial institution how the funds are distributed among the financial institutions in the IntraFi group. (Do Continued on page 7 Rather listen?

Also available in audio format at IABforME.buzzsprout.com 3

WORKERS COMPENSATION – SEVEN TIPS FOR AGENTS

By Cathy Trischan Workers Compensation (WC) is a coverage required by most businesses, and writing WC seems straightforward – until a business has an uncovered claim or an unexpected additional premium at time of audit.

Here are seven tips an insurance agent can use to ensure coverage is written correctly.

1. MAKE SURE THE PROPER ENTITIES ARE INCLUDED AS INSUREDS. It is not uncommon for business owners to form numerous entities for different parts of their operation.

Make sure that any entity with an exposure is properly listed on the WC policy as an insured.

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2. MAKE SURE THAT ALL STATES WHERE OPERATIONS ARE OR MIGHT BE PERFORMED ARE LISTED. It is important that all states where an insured has operations or locations be listed on the policy information page in 3A. Doing so incorporates the WC law of the state into the policy so that benefits the employer is legally required to provide are available.

3C. on the policy’s information page is Other States insurance and is used for new or incidental exposures. While not always possible, one should try to include in 3C. all states except those listed in 3A. and the monopolistic SEPTEMBER 2026

states. The monopolistic states of North Dakota, Ohio, Washington, and Wyoming do not allow private insurers to provide WC coverage.

Businesses with operations in a monopolistic state need to obtain the required coverage directly from the monopolistic state fund.

If an insured begins operations in a state listed in 3C. during the policy term, it has coverage for those states’ benefits for the rest of the policy term. When the policy is renewed, though, it is important that any states where there are operations be moved to 3A. If the insured has operations in a 3C. state as of policy inception, the insured has

COVERAGE CORNER only 30 days to notify the insurer and move that state to 3A.

3. IS THERE COVERAGE FOR INJURIES SUSTAINED BY THE OWNERS OF THE COMPANY? State laws vary with respect to whether bodily injury sustained by owners of the business can or must be covered. Some business owners, when they can, elect not to be covered under the WC policy to save premium. If an owner is excluded from coverage, payroll for the owner is not charged for. Be sure to discuss the available options with business owners so any necessary endorsements to reflect their intent are included.

4. MAKE SURE THE PROPER CLASSIFICATIONS ARE USED. It is important to make sure that the proper classifications are used when placing WC coverage. Failure to properly classify workers can result in unexpected audit results. If in doubt, check with the insurance company’s audit department or with the state’s WC bureau. It is important, too, that clients be educated as to how payroll records should be kept. For some contracting classifications, for example, payroll can be divided between classifications, but only if detailed records documenting an employee’s duties are kept.

5. REVIEW AND EXPLAIN THE EXPERIENCE MODIFICATION FACTOR. Most policies include an experience modification rating or factor (EMR) which is based on previous years’ payroll and claims. When businesses understand the effect that claims have on future premiums, they are often more

willing to implement workplace safety programs and return-towork programs. Agents can help by reviewing the information used to calculate the EMR; mistakes happen, and if incorrect payroll or claims information is reported by an insurer, the EMR may be incorrect.

6. EDUCATE THE CLIENT ABOUT THE IMPORTANCE OF HIRING ONLY PROPERLY INSURED SUBCONTRACTORS. When a business hires subcontractors who do not carry WC insurance, two problems result. First, the business may be responsible for providing WC benefits to injured employees of an uninsured subcontractor. This can affect the loss history and the EMR. Second, insurers typically consider amounts paid to uninsured subcontractors as payroll because they may be required to pay benefits to employees of an uninsured subcontractor.

7. MAKE SURE FEDERAL EXPOSURES ARE PROPERTY ADDRESSED. In addition to exposures under state WC statutes, many businesses have exposures under federal laws.

Contractors building piers or docks on navigable waters, for example, may be subject to Longshore and Harbor Workers Compensation Act. Those working on dredging barges or floating work platforms may be subject to The Jones Act. Endorsements are needed to add coverage for these exposures, and if endorsements cannot be added, stand-alone coverage can be written.

Writing WC correctly is important for both insured businesses and the insurance agent. Following these seven tips and educating the client IABforME.com |

along the way can help to eliminate claim and premium problems.

‘Til next time

Cathy Trischan, CPCU, CRM, CIC, ARM, AU, AAI, CRIS, MLIS, TRIP is IA&B’s commercial lines education consultant. She works with our CIC and CISR programs, as well as our live CE webinars. Catch her at one of our upcoming courses: IABforME.com/education

Rather listen?

Also available in audio format at IABforME.buzzsprout.com

LIVE CE WEBINAR

|

Earn CE and learn about the effects endorsements have on coverage otherwise afforded by a CGL policy.

Instructor: Cathy Trischan

CGL ENDORSEMENTS THAT WILL BREAK YOUR POLICY SEPT 24 1-3 PM

CE

PA/DE: 2 GEN MD: 2 PC

IA&B Members: $50 (save $30!)

Non-Members: $80

Register today.

IABforME.com 800-998-9644, option 1

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NEWS & NOTES

SPECIAL TOPIC CPIA WEBINAR: CYBER INSURANCE

PREDATORY TOWING BILL PASSES IN PENNSYLVANIA

▲ Protections to allow inspection of vehicles by consumers and insurers to inspect damage

Having proper insurance – along with implementing necessary precautions – can keep an organization from financial ruin.

During this webinar, participants will focus on cyber exposures, coverage recommendations, and risk management techniques.

An IA&B-supported bill aiming to crack down on predatory towing practices in Pennsylvania passed the General Assembly and was signed into law by Gov. Josh Shapiro on July 20.

DELAWARE INCREASES WORKPLACE SAFETY PROGRAM CREDITS

While it satisfies the CPIA designation update requirement, this webinar is open to anyone, regardless of designation status.

Predatory towing practices can create significant problems for consumers, agents, and insurers following an accident, including unreasonable charges, delayed access to vehicles, and complications during the claims process.

Oct. 14, 8 AM-5 PM

Key provisions of the bill include:

Approved for 7 GEN/1 ETH CE credits in Pennsylvania and Delaware; 7 PC/1 ETH CE credits in Maryland.

▲ Basic operational requirements for towers and storage facilities

Save your spot: IABforME.com/ eventregistrations/?eventId=7425 800-998-9644, option 1

▲ Restrictions on accident-scene towing unless summoned by the vehicle owner or operator, law enforcement, or municipal personnel ▲ Vehicle release and fee transparency, including itemization of all charges

IGLOO INSURANCE MARKS FIRST ANNIVERSARY Congratulations to Brian Mahon – founder of Igloo Insurance, an IA&B member agency in Middletown, PA – on his agency’s first anniversary.

Pictured: Brian Mahon celebrated Igloo Insurance’s first year in business with a ribbon-cutting ceremony on July 28.

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SEPTEMBER 2026

▲ Criminal penalties for violation

Recently enacted legislation revises the Delaware Workplace Safety Program (WSP) premium credit formula.

The legislation applies only to employers participating in the WSP which qualify for premium credits through the Delaware Department of Insurance (DOI). Employers who do not qualify for this program are not directly affected. The revised credit formula will apply to WSP credit determinations communicated by the DOI effective Dec. 1, 2026, for policies effective on or after Aug. 1, 2027.

DCRB.com (see Information Bulletin #033)

CLAIRE-IFICATION Continued from page 3 they divide all funds by the total number of participating institutions, or do they use the minimum number of institutions in groupings of $250,000?) Knowing this is important for the agency to know for the same tracking reasons, if one of the institutions goes insolvent.

For a more detailed response and a complete overview of fiduciary duties and how to properly name and identify your fiduciary account(s) to leverage $250,000 FDIC protection for each carrier and customer rather than the entire agency account, review IA&B’s statespecific white paper (IABforME.com/ white-papers) on the subject.

RIP INTO COVERAGE

SMOOTH OUT YOUR RIDE Insuring Opportunity Through Mutual Success.¨

Trust Harford Mutual Insurance Group to provide comprehensive property and casualty insurance designed to protect what matters most to policyholders— their business.

Finally, as always, if the customer on whose behalf the premiums are held also has funds in the same institution, then the FDIC standard maximum deposit insurance amount might be exceeded, but absent that circumstance, the product as described seems adequate to protect the fiduciary funds held by the agency on behalf of its principals. * See also last month’s Primary Agent Claire-ification article for tips on proper designation and naming of the account as a pass-through.

This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice.

Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Insurance Agents & Brokers nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.

Learn more about the other Property & Casualty classes we write. www.harfordmutual.com (800) 638-3669

IABforME.com |

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Q&A with

LISA BROADBENT Lisa Broadbent is president of Broadbent Insurance, an independent insurance agency in Newark, DE. Lisa sits on the Delaware Insurance Commissioner’s Agent Advisory Panel, as well as the Delaware Assigned Risk Board, and is Chair of the IA&B of Delaware Government Relations Committee.

Q. You followed your grandfather, father, and uncle into the family business. When and why did you know you wanted a career in insurance?

A. When I graduated from college, I placed my job offers out on the kitchen table and asked my dad to help me decide. He looked at them and asked, “Where’s your offer to become a Nationwide insurance agency owner?”

I told him I wasn’t planning on following in his footsteps, but he refused to help me make a decision until I included the insurance agency opportunity. So I went down to the Nationwide agency manager, obtained the offer, and returned home.

Once again, I spread all of the offers across the kitchen table. As I compared them, something became clear.

One job promised a high salary, but the insurance agency opportunity offered unlimited earning potential. Another had an attractive benefits package, but as an agency owner, I could build the benefits that best fit my life and future. A third offered a path to climb the corporate ladder, but with the insurance opportunity, I realized I was already at the top – I would be building something of my own.

My dad never told me which path to choose. He simply smiled as I talked through the possibilities. In that moment, I had answered my own question. The rest, as they say, is history.

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Q. Tell us about your agency and how it has grown over the years.

A. When I started my insurance agency, it was my first job out of college. Because it was a scratch agency, I had to build everything from the ground up. In fact, the very first policy I wrote was my own, spinning myself off my parent’s insurance policy.

Since my family and friends were already insured with either my dad’s agency, my uncle’s, or my cousin’s, I couldn’t rely on my personal network to grow my business.

Instead, I had to earn the trust of complete strangers. I made it a habit to ask everyone I met if I could provide them with an insurance quote and whether they knew someone else who might benefit from a conversation.

One relationship at a time, those conversations turned into customers, referrals, and lasting partnerships. Over the years, that persistency has helped to grow our agency into a more than $12 million book of business with five active producers. Looking back, what started with a single policy became a thriving business built on hard work, relationships, and commitment to serving our clients.

Q. What professional accomplishment are you most proud of and why?

A. I am incredibly proud of what our agency has become.

More than a successful business, it has grown into a family.

SEPTEMBER 2026

AGENT INTERVIEW We have built lasting relationships with our clients and a culture that values trust, service, and supporting one another.

I am also proud to have continued the family tradition that my grandfather started. Seeing that legacy with the next generation has been especially meaningful. When my son, Dominic, joined our team in 2017, it marked another chapter in our family’s story and reinforced the values that have guided our agency from the very beginning.

Q. Thank you for your involvement and leadership with IA&B’s government relations efforts. What drives your interest in advocacy?

A. My commitment to advocacy also traces back to my father. He always told me that advocacy is an insurance policy for our industry – and ultimately for our jobs. Those words have stayed with me throughout my career.

The insurance industry is often misunderstood. Many people don’t fully understand the value we provide, the role we play in protecting families and businesses, or the impact that legislation and regulation can have on our ability to serve our clients. That is why I believe it is our responsibility to educate policymakers and the public, share our perspective, and advocate for an environment where our industry can continue to thrive.

With the adoption of the Surplus Line Insurers Export List, certain lines of insurance are now exempt from the annual Due Diligent Form requirement. This change has significantly reduced administrative work, saving agents valuable time while maintaining compliance.

This program has been a tremendous success and is a great example of what can be accomplished through collaboration. This important improvement would not have been possible without IA&B’s leadership and partnership.

Q. What would you tell other independent agents to encourage their involvement with IA&B advocacy efforts?

A. Joining other independent agents in IA&B’s advocacy efforts is one of the best ways to protect the independent agency system and serve your clients’ interests.

Q. When you’re not working, how do you enjoy spending your time?

A. When I am not working in the insurance industry or advocating on its behalf, I enjoy spending time at the beach, reading, taking walks, gardening, cooking, and being with my friends and family.

By investing our time in advocacy today, we help preserve a strong and vibrant insurance industry for future generations of agents, employees, and the clients who depend on us.

Q. It can be easy, especially for small business owners, to feel disheartened about politics. Can you share any examples of when you felt like IA&B was able to move the needle on an issue?

A. We worked with IA&B and the Delaware Department of Insurance to develop a Surplus Line Insurers Export List.

While this may not sound significant at first, it has had a meaningful impact on the insurance agencies who write in the state of Delaware.

Previously, agents were required to complete a Due Diligence Form each year for every client insured through a surplus line carrier, even when those risks were unlikely to ever qualify for coverage in the admitted market.

For many agencies that meant completing hundreds of unnecessary forms annually.

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+ NC S + P P2

R

+ K I C KE RS

+

With that focus comes a continued commitment to helping agents grow their businesses by continuing to offer competitive products, rewarding compensation opportunities, and innovative, easyto-use technology.

WARD

S+

Investing in independent agents has always been critical to our long-term success. With more consumers and businesses seeking choice, value, and personalized guidance, our partnership with agents remains a key part of our growth strategy.

Thanks in large part to the support and partnership of independent agents, our personal auto, commercial auto and recreational lines products continue to lead the channel. And as our property business returns to a healthier, more sustainable position— with profitability and performance continuing to improve—we’re increasingly focused on expanding growth opportunities in more markets across the country.

N RE

Progressive and Independent Agents: Growing Together for the Road Ahead

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US + AG N O E

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PL

Insurance Agents & Brokers proudly recognizes Progressive as a Platinum Partner & Education Steward.

IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

TR

PLATINUM PARTNER PROFILE

Positioned for growth We’re well-positioned for growth across our portfolio and ready to enable independent agents to help more customers find the coverage options that fit their needs.

Agents can build on Progressive’s position as the number one personal and commercial auto insurer by also quoting our industry-leading recreational lines and small business products, all of which feature competitive rates from a brand that consumers know and trust. Plus, for agents with a Progressive property appointment, we’re a great solution for your customers’ home-and-auto bundle needs.

Multiple options. Multiple ways to grow (and earn).

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SEPTEMBER 2026

Thank You

Thanks to these partners for supporting the independent agent network.

It Pays to Be Progressive Progressive has never offered more opportunities for eligible agents to earn and grow with us.

Through our “It Pays to Be Progressive” initiative, we highlight the many ways eligible agents can earn beyond standard commissions for doing business with us, including: • Agent Rewards incentives • Extra commission initiatives • Bonus kickers These programs reflect our ongoing commitment to investing in agent success and creating meaningful opportunities for agencies to increase revenue while helping more customers choose Progressive.

Investing in technology to make work easier Progressive continues to invest in technology that helps agencies save time, simplify workflows, and serve customers more efficiently. From integrated quoting and policy management tools to self-service capabilities and mobile solutions, our focus remains on making Progressive easy to do business with so agents can spend more time growing their agencies … and growing their bottom lines.

Together, we’re building on strong momentum across personal and commercial lines while continuing to invest in the products, programs, and tools that help independent agents grow. We’re grateful for the partnership of agents across the country and excited for the opportunities ahead.

IABforME.com |

PARTNERS & EDUCATION STEWARDS Progressive Risk & Insurance Education Alliance PLATINUM PARTNERS Chesapeake Employers’ Insurance Company Erie Insurance Ironpeak (formerly Iroquois) Keystone Millers Mutual Insurance NJM Insurance Group Penn National Insurance Plymouth Rock Assurance Vesper Risk GOLD PARTNERS EMC Insurance Companies Farmers of Salem The Insurance Alliance Network Liberty Mutual Insurance MMG Insurance Nationwide Insurance Company Openly POM Insurance Company SECURA Insurance Selective Insurance BECOME A PARTNER TODAY Interested in becoming a partner?

Reach out today.

Tim Wonder IA&B VP-Membership 717-918-9223 TimW@IABforME.com 11

When Lawsuits Become an Investment Strategy: TPLF Inflates Claims and Premiums

By John Savant, IA&B Government Affairs Director Litigation is no longer just a way to resolve disputes.

Increasingly, it is also an asset class.

Under a typical third-party litigation funding (TPLF) arrangement, an outside investor provides money to a claimant or law firm in exchange for a share of a future settlement or judgment. Although the funder is not a party to the lawsuit, it may have millions of dollars at stake and, under some agreements, the contractual authority to approve or block a proposed settlement.

That influence is often hidden. Defendants generally must disclose insurance agreements that may be available to satisfy a judgment. Plaintiffs, however, are usually under no comparable obligation to identify the investors financing their lawsuit, reveal how much those investors stand to collect, or explain what influence they have over litigation and settlement decisions.

Market estimates currently value the TPLF industry in the United States at roughly $17.5 billion to $20.6 billion, with projections suggesting it could reach between $51 billion and $67 billion by the mid-2030s.

TPLF fundamentally alters the economics of litigation by giving law firms the capital to pursue larger inventories of claims and sustain speculative cases that might otherwise be dropped. Because these arrangements are rarely disclosed, they can conceal conflicts of interest or create opportunities for foreign governments or sovereign wealth funds to conduct corporate espionage and gain access to sensitive information through the discovery process. Defendants, insurers, mediators, and judges may all be working toward resolution without knowing that an undisclosed investor has the power to reject a reasonable settlement and hold out for more.

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These costs extend beyond the courtroom. A recent Insurance Information Institute analysis estimated that legal system abuse and litigation financing added $231.6 billion to $281.2 billion in liability losses and defense expenses over the past decade. Meanwhile, the number of “nuclear verdicts” exceeding $10 million has more than quadrupled since 2020, while the median award has increased from $21.5 million to $51 million. TPLF is not the only driver of social inflation, but it is one of the most opaque and fastest-growing.

Pennsylvania: Sunlight in a “Judicial Hellhole” Earlier this year, IA&B submitted comments supporting the Pennsylvania Supreme Court Civil Procedural Rules Committee’s proposed amendment to Rule 4003.2. The proposal is a narrow first step, mandating the disclosure of TPLF agreements in civil suits, and we expect it to be implemented in the near future.

Pennsylvania’s litigation climate makes this transparency especially important; Pennsylvania, and in particular the Philadelphia Court of Common Pleas, was ranked by the American Tort Reform Foundation as the nation’s No. 1 “Judicial Hellhole” in 2025. After Pennsylvania’s Supreme Court changed its venue rule to allow litigants more freedom to venue shop for a sympathetic jurisdiction, state court data shows filings in Philadelphia rose 97% in a single year.

IA&B is also opposing House Bill 1913 in Pennsylvania, which would permit attorneys to suggest specific dollar amounts or mathematical formulas for damages during closing arguments in civil trials: for example, asking a jury to award “$10,000 for every day of pain.” This tactic, known as anchoring, can plant an arbitrary figure in jurors’ minds

SEPTEMBER 2026

LAWSUITS AS INVESTMENTS

even when there is no evidence supporting that amount.

In a state already struggling with nuclear verdicts, venue shopping, and outside investment in litigation, HB 1913 would add yet another mechanism for inflating jury awards.

Maryland: Defending Predictability IA&B recently met with the Maryland Insurance Administration to discuss, among other issues, the impact of TPLF on affordability. Senate Bill 894 and House Bill 1298 would have required litigation financiers to be licensed and require disclosure of funding agreements in civil actions. Both bills received hearings during the 2026 session but failed to advance.

Those discussions complement another recurring IA&B priority: opposing legislation to eliminate Maryland’s cap on non-economic damages. In 2026, Maryland Senate Bill 474 and House Bill 476 again sought to remove the cap for personal injury and wrongful death cases. Removing the cap would create greater uncertainty in personal and commercial auto, general liability, and umbrella and excess markets. It would also make Maryland more attractive to TPLF investors by increasing the potential return on highvalue claims and opening the door to more nuclear verdicts.

Delaware: Disclosure Depends on the Courtroom Delaware’s examination of TPLF began in the General Assembly. In 2022, IA&B worked with then-Senator Kyle Evans Gay (now Delaware’s lieutenant governor) to pass Senate Concurrent Resolution 127, directing the Delaware judiciary to study third-party litigation funding and consider disclosure requirements. The resolution led to a Delaware Supreme Court committee report the following year.

However, the committee’s recommendations were advisory and did not establish a statewide disclosure requirement.

One federal court in Delaware has taken a stronger approach. In 2022, U.S. District Court Chief Judge Colm F. Connolly issued a standing order requiring parties in cases assigned to him to disclose certain nonrecourse litigation-funding arrangements. A funded party must identify the funder, describe its financial interest, and disclose whether the funder’s approval is required for litigation or settlement decisions. The order remains posted among Judge Connolly’s standing orders, but it is not a districtwide rule, meaning disclosure still depends on which judge receives the case.

IABforME.com |

TPLF Under Scrutiny Across the Country Recent action across the country shows that TPLF restrictions need not stop at disclosure. Earlier this year, Ohio established a broad regulatory framework for litigation funding, requiring registration, detailed consumer disclosures, provides a 10-business-day cancellation period, prohibits contractual terms that give the funder influence over settlement decisions, and completely prohibits TPLF funding by foreign entities.

North Carolina went even further. Session Law 2026-14 completely prohibits outcome-contingent TPLF entirely, with penalties of up to $50,000 per violation.

A year ago, during debate over the “One Big Beautiful Bill” budget reconciliation package, IA&B worked closely with our national affiliate in Pennsylvania and Delaware, the Big “I,” to secure the inclusion of a steep excise tax on TPLF. Pegged to the maximum personal income tax rate, plus a little more off the top, the proposed 40.8% rate would have been enough to cripple the TPLF industry nationwide. Although the provision was initially included, it was unfortunately deemed incompatible with Senate budget rules under the “Byrd Rule” and stripped from the final package. It is no coincidence that our primary champion on that proposal, Sen. Thom Tillis, represents North Carolina: the first state to ban TPLF statewide.

The work continues through two standalone federal proposals, the “Tackling Predatory Litigation Funding Act,” which would impose the same 40.8% tax treatment on litigation funding profits, and the “Protecting Our Courts from Foreign Manipulation Act,” which would prohibit TPLF by foreign governments and sovereign wealth funds.

IA&B will continue pressing for meaningful disclosure, limits on funder influence, safeguards against foreign involvement, and broader reforms that restore predictability to the liability system. Whether in Harrisburg, Annapolis, Dover, or Washington, D.C., our goal is the same: to prevent third-party litigation financing from driving claims, premiums, and coverage challenges even higher.

IA&B Government Affairs Director John Savant penned this article. For more information, contact the IA&B Advocacy Department at advocacy@IABforME.com or 800-998-9644, option 4.

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2025 CONTRIBUTORS PENNSYLVANIA President's Club ($1,000+) Tod Aronson E R Munro and Company Andrew Enders Enders Michael Gaetano The Hartman Group Greg Gunn Gunn-Mowery LLC Mike Harter E K McConkey & Company Lew Kachulis Gilbert's Risk Solutions John Olkowski E K McConkey & Company Donna Roper E K McConkey & Company

Governor's Club ($500 - $999) Shannon Blews Hutton-Blews Insurance LLC Randy Close Wise Insurance Agency Tony Cusati Sitter Insurance LLC Frank Ebner E K McConkey & Company

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James Fitzsimmons Fitzsimmons Insurance Agency Inc

Jesse Harlan Enders

Dorine Goodridge Kelly Insurance Agency Inc

Kurt Gehman E K McConkey & Company

John Hollister KAI Yurconic Insurance Agency

Don Hamm Donald Hamm & Sons Insurance LLC

Brock Lytle E K McConkey & Company

Bob Knowles Knowles Associates

Shayne McIntosh JPI Insurance Associates Inc

Kevin Kreider Kreider Insurance Associates Inc

Mike Landis Balsbaugh Insurance Agency, Inc.

Rita McMullen PDM Insurance Agency Inc Laura Mercadante E K McConkey & Company Chris Miller Miller Insurance Protection Team Rob Walbeck R E Walbeck Agency Inc Marshall Wolff Kressler Wolff & Miller Inc Chad Yoder FIFS LLC Kyle Zehr FIFS LLC Timothy Ziegler E K McConkey & Company

Senate Level ($250 - $499)

Don Enders Enders

Sarah Brown Keller-Brown Insurance Services

Jason Ernest IA&B

Mark Bruns Bruns Insurance Services LLC

Lori Marvin Barr's Insurance

Michael McGroarty McGroarty & Bradburn Insurance

Dan McGowan McGowan Insurance Agency LLC

Lisa Parry William B Parry & Son Ltd

Karyn Miller Hinkle Insurance Agency Inc

Bill Purdy Purdy Insurance Agency Inc

Claire Pantaloni IA&B

Debie Remaley Remaley Insurance Inc

Shannon Polka Charles P Leach Agency Inc

Tara Silfies Alera Group

Rick Rankin Murray Insurance Assoc Inc

Curtis Unruh Unruh Insurance Agency Inc

Ray Reinard Reinard Agency

Bob Walbeck R E Walbeck Agency Inc

Bill Rittenhouse WM Rittenhouse Agency Inc

House Level ($100 - $249)

Ron Rothenberger Rothenberger Insurance Services LLC

Gino Bartoli Gallagher

John Shields R J Lutes Insurance Agency

Connie Bence C.L. Bence Inc

Billy Siegel Siegel Insurance Inc

Karl Eisaman McDowell Associates

Mark Sitler The Hartman Group

SEPTEMBER 2026

We thank everyone below for contributing to AgentPAC in 2025. Your financial support helps make sure independent agents’ voices are heard during the legislative process. It also assists us in advancing agents’ political interests on key insurance and business issues in Pennsylvania, Maryland, and Delaware.

Join your fellow IA&B members and support AgentPAC. IABforME.online/AgentPAC

MARYLAND

DELAWARE

Jeff Spotts Spotts Insurance Group Inc

Governor's Club ($500 - $999)

Barry Winstead Winstead Insurance Agency

President's Club ($1,000+)

Scott Surra St Marys Insurance Agency Inc

Greg & Tony Bennett Famous & Spang Associates LLC

House Level ($100 - $249)

Lee Dotson Bellevue Insurance Services LLC

Steve Trego Trego Insurance Agency LLC

Bob Klinger Klinger & Associates Inc

Joe Healy Healy Insurance Group Inc

Jim Hartstein The Insurance Market Inc

Abbie Turner Michael Turner Insurance Agency Inc

Kip White American Insurance and Financial Services Inc

Kristen McArdle McArdle Insurance Agency Inc

Governor's Club ($500 - $999)

Bill Reagle CNR Insurance Inc

Scott Kidner CS Kidner Associates

Renee Woolridge Dimeling & Schrot Inc

Contributor Level Blake Henry BDH/Konhaus LLC Bob Smyrl Robert L Smyrl Inc

Senate Level ($250 - $499) Butch Bradley Bradley Atlantic LLC Rick Gerety Rick Gerety & Assoc Inc

Chris Simpson Simpson's Olde Towne Insurance Inc Mike Thomas Lighthouse Insurance Services

Frank Lebherz Lebherz Insurance Agency Inc

Contributor Level

Blair Mattheiss B J Mattheiss Insurance Inc

Michael Cruz Foresight Insurance LLC

Stacey Nicholson CNR Insurance Inc Larry Sanders Edward L Sanders Insurance Agency

Senate Level ($250 - $499) Dick Corroon Weymouth Swayze & Corroon Insurance Inc Hunter McHugh McHugh Insurance Group Pete Wolff Wolff Insurance Agency

Contributor Level Steve Burnett CBM Insurance Agency LLC

Charles Veirs Insurance Networks Corp

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PRIMARY AGENT Editor: Karen Robison KarenR@IABforME.com 717-918-9209 Contributing editors: Jennifer Ross Megan Fioretta Sarah Haas Sales Account Executive: Rebecca Sieg rebecca.sieg@theygsgroup.com 717-430-2351

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