Happy Wednesday! In this week’s Big I Buzz: How the government shutdown could impact insurers.

Lengthy Government Shutdown to Impact Insurers, Says AM Best

As the government shutdown begins, AM Best warns of potential ripple effects across the insurance industry. The extent of disruption will depend on how long the shutdown lasts—previous shutdowns have generally been brief, with the longest in recent history (December 2018) lasting 34 days.

A prolonged shutdown could directly and indirectly affect insurers as consumers and businesses adjust spending and investment decisions. Possible impacts include reduced government spending, disruptions in social services, and volatility in financial markets.

Additionally, the National Flood Insurance Program (NFIP), administered by FEMA, expired on Sept. 30. Without reauthorization, FEMA will be unable to issue new flood policies. Read more here.

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list.

Happy Wednesday! In this week’s Big I Buzz: Wisconsin to receive federal disaster aid after summer floods, and actuaries raise concerns over Medicare’s long-term costs.

Six States to Receive Federal Disaster Aid From Summer Floods

President Trump has approved federal disaster aid for Wisconsin and five other states following storms and floods that occurred this spring and summer. The disaster declarations will provide federal funding to Wisconsin, Kansas, North Carolina, North Dakota, and tribal areas in Montana and South Dakota. In each case except Wisconsin, the approval process took more than a month—continuing a trend of longer waits for disaster relief. Read more here.

Actuaries Warn Medicare Costs Threaten Long-Term Sustainability

The American Academy of Actuaries warned in a recent webinar that rising Medicare spending poses a long-term challenge for the program. Increased enrollment, along with higher costs for Part B and Part D prescription drug coverage, are projected to push premiums sharply higher over the next decade.

• Part B premiums: $147/month in 2024 → $347/month by 2034
• Part D premiums: $34/month in 2024 → $51/month by 2034

These increases could significantly impact retirees living on fixed incomes. Read more here.

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list.

Happy Wednesday! In this week’s Big I Buzz: Tort reform gains momentum as nuclear verdicts reshape liability exposure. Plus, employers navigate vaccine coverage confusion as the FDA changes COVID vaccine rules.

Tort Reform Gains Ground as Nuclear Verdicts Reshape Liability Landscape

The liability litigation environment is shifting as nuclear verdicts continue to surge and states roll out new tort reforms aimed at restoring balance, according to Sedgwick’s 2025 liability litigation trends report.

In 2024, nuclear verdicts against corporations hit record highs: 135 lawsuits resulted in awards of more than $10 million—a 52% jump from 2023. Altogether, these verdicts totaled $31.3 billion, marking a staggering 116% increase year over year. Read more here.

Employers Face Vaccine Coverage Chaos as FDA Sets New Rules for COVID Vaccines

Employers are facing fresh challenges when it comes to covering COVID-19 and other vaccinations. Last week, the U.S. Food and Drug Administration announced the end of emergency-use rules for COVID vaccines, including Novavax’s Nuvaxovid, while also tightening access guidelines for others. This shift complicates coverage requirements for employer health plans.

Even as wastewater testing indicates a new COVID wave—showing about 3.6 million new weekly infections in the U.S. and over 1,300 excess deaths—the FDA maintains that the pandemic emergency period has ended. Officials now say the current, lower level of risk no longer supports encouraging routine vaccination for healthy people under 65. Secretary of the U.S. Department of Health and Human Services Robert F. Kennedy Jr. appeared to imply in comments on X that working-age people with health problems, such as obesity, might be able to get COVID vaccine shots without a prescription, but that others might need a prescription. Read more here.

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list.

By Misha Lee, IIAW Government Affairs

Governor Tony Evers officially signed the 2025-27 biennial state budget bill (2025 WI Act 15) into law on Thursday, July 3rd only hours after the Republican controlled Legislature sent him the bill for his signature. The comprehensive $111.1 billion plan represents a 12 percent increase in spending and includes several provisions directly impacting the IIAW membership and insurance industry. 

The budget's passage came swiftly after the state’s fiscal year ended on June 30. With new legislative maps creating tighter margins in the Senate (Republicans holding an 18-15 majority), securing bipartisan support for the budget was a significant challenge. Ultimately, a deal was struck on July 1st after intense, on-and-off negotiations over six weeks, with the Senate Democratic leader playing a crucial role in the final discussions with Republican legislative leaders.

Here’s a breakdown of key insurance related provisions included in the budget bill: 

Insurance Fraud Paralegal Position

The Office of the Commissioner of Insurance (OCI) will receive a new paralegal-advanced position to bolster its fraud investigation activities. This addition complements a full-time attorney position approved in the previous budget, reinforcing the state's commitment to fighting insurance fraud. 

New Driver Education Grants Program

A significant win for the industry, the budget establishes a new, ongoing driver’s education grants program. The Wisconsin Department of Transportation (DOT) will receive $6 million annually from OCI for this initiative. This funding, previously lapsed to the state’s general fund, reflects the insurance industry's dedication to improving driver education resources for young drivers. 

Sales and Use Tax Exemption for Information Products

A crucial provision exempts certain information products from state sales and use tax. This applies to reports, statistics, records, and other data used exclusively by certified insurance companies or licensed insurance intermediaries for quoting, underwriting, risk assessment, rate setting, or claims adjustment. This exemption covers items purchased by insurers or affiliates, transferred in tangible or digital form, and charged transactionally or via subscription. This measure is estimated to save the insurance industry approximately $8 million in 2025-26 and $10.9 million in 2026-27, rectifying what the industry viewed as incorrect tax collection by the Wisconsin Department of Revenue (DOR). 

Worker’s Compensation Hospital Service Fee Schedule

The budget introduces a new fee schedule specifically for hospital services related to Worker’s Compensation claims. This schedule applies if the service is from an eligible hospital, qualifies for Medical Assistance program reimbursement, and is paid within the specified period. The Wisconsin Department of Workforce Development (DWD) Worker’s Compensation Division will oversee the implementation of this complex provision, a key priority for Wisconsin Manufacturers and Commerce (WMC). 

Beyond these insurance-specific items, the broader budget agreement also addresses a range of other state priorities, including: 

Tax Cuts: $1.5 billion in income tax cuts, primarily benefiting the middle class, by expanding the second lowest income tax bracket, making the first $24,000 of retirement income tax-free for those 67 and older, and eliminating the 5% sales tax on electricity. 

Child Care Investment: Over $330 million dedicated to the child care industry, including the state’s first-ever state-funded child care program using general purpose revenue. 

K-12 Education: Nearly $1.4 billion increase in spendable revenue for K-12 schools, raising the special education reimbursement rate to 42% in the first year and 45% in the second year. 

Universities of Wisconsin (UW System): An increase of over $256 million for the UW System. 

Transportation Funding: An additional $200 million for transportation through various fee increases. 

Medicaid and Hospitals: $1.4 billion to cover Medicaid costs and an increase in the hospital assessment from 1.8% to 6%, generating over $1 billion in additional annual funds for hospitals. The state will retain 30% of matching federal funds for Wisconsin’s Medicaid trust fund. 

The budget brings both opportunities and operational adjustments for insurance professionals across the state. Staying informed about these changes is crucial for navigating the evolving regulatory and economic landscape.

Happy Wednesday! In this week’s Big I Buzz: the Big "I" outlines key takeaways from the new tax law, and Swiss Re offers an updated look at the US P&C insurance landscape.

Federal Tax Reform: The Big ‘I’ Shares Takeaways From New Tax Law

With the One Big Beautiful Bill (OBBB) now signed into law, the Big “I” has released a summary to help independent insurance agents understand the tax provisions included in this sweeping legislation. The new law represents a major overhaul of U.S. tax policy, making many elements of the 2017 Tax Cuts and Jobs Act (TCJA) permanent while introducing additional reforms.

A key highlight for many independent insurance agencies: the bill permanently extends the 20% pass-through deduction for qualified business income under Section 199A.

Read more and view the full summary from the Big “I” here.

Swiss Re: US Property & Casualty Outlook: Sunny Skies, but Pack an Umbrella

Swiss Re has released its latest outlook for the U.S. Property & Casualty industry, noting that the sector achieved a 99% combined ratio in Q1 2025—an encouraging sign of resilience despite challenges like the California wildfires.

Key takeaways from the report include:

• The 2025 outlook remains positive, supported by historically strong—though moderating—underwriting results.
• Growth is expected to slow, but profitability should remain stable. However, the potential for loss-cost shocks remains.
• Industry return on equity (ROE) is projected at 10% for both 2025 and 2026, with investment gains offsetting weaker underwriting margins.
• Premium growth is forecasted at 5.5% in 2025, slowing to 4% in 2026—still considered strong by historical standards.

Read the full report here.

For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list.