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.

Happy Wednesday! In this week’s Big I Buzz: homeowners premiums are on the rise in every state. Plus, four things your should do if your carrier has been hacked.

Homeowner’s Insurance Premium Rates in Every U.S. State Are Going Up

Homeowners insurance premiums are rising across every U.S. state, with significant increases expected throughout 2025. Factors such as natural disasters, rebuilding costs, and tariffs on imported goods are driving these higher rates, putting pressure on homeowners’ budgets and overall housing affordability. Experts recommend renewing policies early and considering steps to improve home resilience to help manage future premium increases. Read more here.

4 Things You Should Do If Your Carrier Has Been Hacked

Cyberattacks on insurance carriers can disrupt services and expose sensitive client data. If your carrier has been compromised, it's crucial to act swiftly to protect your clients and your agency's reputation. By taking proactive steps, you can mitigate the impact of a cyberattack on your agency and clients. Read the tips on IA Magazine 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: what’s shaping the 2025 P&C market so far. Plus, a closer look at how climate disasters could impact the future of foreclosures.

What to Watch: The Trends for P/C Insurance in 2025 So Far

As we reach the halfway point of 2025, it’s a great time to review the key trends shaping the property/casualty market so far—and consider what may lie ahead. The industry continues to navigate a complex environment marked by economic uncertainty and shifting consumer expectations. Policyholders are increasingly budget-conscious, prompting insurers to rethink engagement strategies and offerings. While the second half of the year remains unpredictable, a few emerging trends are worth keeping a close eye on. Read more here.

Climate Disasters Could Drive Foreclosures to $5.4B Over Next Decade

Foreclosures linked to climate disasters could total $5.4 billion by 2035, up from $1.2 billion in 2025, according to First Street’s 13th National Risk Assessment. The report highlights a 1,580% increase in climate-related costs over the past four decades—reshaping how households, lenders, and investors assess risk. With extreme weather now the leading cause of homeowners insurance claims, mortgage lenders rely heavily on insurance as a safeguard against loan defaults. As risks intensify, so does the financial pressure on both borrowers and the institutions that serve them. 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 lawmakers will consider expanding PTSD law. Plus, US health insurers jump as 2026 Medicare payment rates exceed expectations.

Wisconsin Lawmakers to Consider Expanding PTSD Law

Wisconsin lawmakers are considering a new bill that would extend workers’ compensation eligibility for post-traumatic stress disorder (PTSD) to a broader group of first responders.

Currently, only firefighters and law enforcement officers are covered under a standard that does not require their PTSD to stem from unusually high stress. Senate Bill 168 would add emergency medical responders, EMS practitioners, volunteer firefighters, correctional officers, dispatchers, coroners, and medical examiners to the list. Read more here.

US Health Insurers Jump as 2026 Medicare Payment Rates Exceed Expectations

The U.S. government has finalized a 5.06% average increase in 2026 Medicare Advantage payment rates, more than doubling the initially proposed 2.2% from January. This substantial hike is expected to benefit major insurers like UnitedHealth Group, Humana, and CVS Health, allowing for enhanced plan benefits and improved profitability. Following the announcement, Humana's stock surged 11.5%, while CVS Health saw a 6.7% increase. The Centers for Medicare & Medicaid Services (CMS) attributed the updated rate to more comprehensive cost data through Q4 2024, reflecting the Trump administration's strong support for the Medicare Advantage program. 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.