Governor Kemp Proposes Tort Reform To Address Insurance Costs in Georgia

Georgia Governor Brian Kemp has introduced a tort reform package aimed at modifying the state's legal environment, which he says is increasing costs for businesses and consumers. The plan, announced alongside Lieutenant Governor Burt Jones, Speaker Jon Burns, and other officials, seeks to revise liability standards, adjust damages calculations, and regulate third-party litigation funding. According to the governor's office, the proposal is designed to create a fairer legal system while ensuring access to civil justice.

"Our legal environment is draining family bank accounts and hurting job creators," Governor Kemp said in a statement from the governor's office. He added that after months of discussions with stakeholders, it was clear the current system is "unacceptable, unsustainable, and jeopardizes our state's prosperity." The proposed reforms, he said, would protect Georgians' rights while stabilizing insurance costs.

Lieutenant Governor Burt Jones, in a statement from his office, said Georgia must maintain a business-friendly climate to remain competitive. He emphasized the need to address "hidden costs" embedded in the state's tort laws. Georgia Insurance Commissioner John King also voiced support for the plan, saying in a state insurance department statement that the current legal system acts as "a hidden tax" on families and businesses.

According to the governor's office, the legislation includes several key provisions. It would limit businesses' liability for negligent security to circumstances they directly control. It also seeks to ensure that damages awarded in personal injury cases reflect actual medical costs paid rather than higher amounts initially billed. Additionally, the proposal would prohibit attorneys from using certain tactics to suggest damage amounts to juries, a practice known as "anchoring."

Another provision would allow defendants in auto accident cases to introduce evidence of whether a plaintiff was wearing a seatbelt. The proposal would also close a loophole that allows attorneys to recover fees twice in a single lawsuit, the governor's office stated. Other changes include restricting plaintiffs from voluntarily dismissing cases midtrial to refile them in a different jurisdiction and permitting courts to bifurcate trials so liability is determined before damages are considered.

The legislation also aims to regulate third-party litigation funding. According to the governor's office, the bill would prohibit foreign entities from funding lawsuits to gain economic or political advantages. It would also increase transparency and limit litigation funders' influence over case strategy.

Speaker of the House Jon Burns, in a statement from his office, said businesses across the state have expressed concerns about Georgia's legal environment and the need for reform. He stated that the House looks forward to working with the governor and stakeholders to balance the legal system while maintaining stability in insurance markets.

Georgia has also seen significant growth in its captive insurance sector in recent years. While it remains a smaller domicile compared to others in the United States, the state has been among the fastest-growing. The number of captives licensed in Georgia has increased from just 9 in 2014 to 56 by the end of 2023. Over the same period, annual captive premium volume surged from $168.5 million to more than $7 billion.

The Georgia Captive Insurance Council (GCIC), which recently launched as the state's official trade association and advocacy group for captive insurers and risk retention groups, replaces the Georgia Captive Insurance Association, which formally dissolved in 2023. Former Georgia Department of Insurance Captive Regulator Travis Bowden was elected as the GCIC's first chairman of the board. "Georgia is once again a major player in the captive insurance sector," Mr. Bowden said in a GCIC statement.

Observers attribute Georgia's captive growth to strong support from state regulators and lawmakers. According to the Georgia Department of Insurance, legislative measures—including reductions in premium tax rates and capitalization requirements—have enhanced the state's attractiveness as a captive domicile. Georgia Insurance Commissioner John King has expressed continued support for policies that make it easier for businesses to form captive insurance companies in the state.

As businesses seek cost-effective risk management solutions, captive insurers—including those managing claims and liability for their organizations—will be monitoring how proposed tort reforms could impact the broader insurance landscape in Georgia.

The proposed changes, if enacted, would bring Georgia's legal framework more in line with neighboring states, the governor's office stated. The General Assembly is expected to consider the legislation during the current session.