The third-party funding market changed because of a government ruling last year, John Rossos, Chairman and CEO of BridgePoint Risk Management Inc., tells the Law Times.
A Financial Services Commission of Ontario (FSCO) ruling transformed the market after saying that legal cost protection must be underwritten by licensed insurers and sold to clients through insurance brokers under the Insurance Act.
“Any private indemnity or legal cost protection must now be tied to a regulated insurance product,” says Rossos, the Toronto company’s founder. “Lawyers can’t provide an indemnity to their clients because they are not licensed insurers.”
He says the Omega General Insurance Company now underwrites LISC in Canada, where two leading global insurers with AA credit ratings reinsure the risk. Although Rossos says he strongly disagrees with the order, the company reconfigured its products into insurance policies to protect his clients.