Happy Wednesday! In this week's Big I Buzz we look at the election's potential impact on the fate of a tax break for small businesses, and where Wisconsin ranks among states with the highest hospital prices in the U.S.

Election May Determine Fate of Tax Break Important to Small Brokerages

The 2024 election could decide the future of a tax break for small businesses, including many insurance brokerages. The 2017 Tax Cut and Jobs Act introduced a 20% tax deduction for business owners who pay taxes through their personal returns. This provision, along with other parts of the law like lower personal rates and estate-tax limits, will expire at the end of 2025, leaving Congress to address them next year. Renewing these tax breaks could cost the government $4.6 trillion, according to the Congressional Budget Office, and this issue may become a major debate of the year. The outcome will depend on who wins the White House and controls the House and Senate after the November elections. Read more here.

Wisconsin Ranks No. 5 for States with Highest Hospital Prices

The RAND Corp.’s updated Hospital Price Transparency Study ranked Wisconsin fifth for highest hospital prices, using Medicare reimbursement as a benchmark. In 2022, Wisconsinites paid an average of 318% of what Medicare would have paid for hospital services, compared to a national average of 257%. The study found significant price disparities: nearby states like Michigan, Iowa, Indiana, and Minnesota had relative prices of 192%, 185%, 297%, and 238% of Medicare, respectively. Price variations between providers are due to a lack of transparent pricing and market consolidation. Additionally, costs vary by care site, with telehealth and office visits being the most cost-effective, followed by urgent care, and emergency care and hospital services being the most expensive. Facility inpatient prices averaged 242% of Medicare, outpatient prices 288%, and outpatient professional fees 190%. 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, we discuss NAMIC & IIABA's response to the recent revisions to mortgage requirements, and how to get started with generative AI through Catalyit's webinar series during AI Month.

NAMIC & IIABA Submit Joint Letter to FHFA Administrator

The National Association of Mutual Insurance Companies (NAMIC) and the Independent Insurance Agents and Brokers of America (IIABA) submitted a letter regarding the property insurance impacts of the recent revisions to mortgage requirements by Fannie Mae and Freddie Mac, which were indicated as being made at the direction of the Federal Housing Finance Agency.

The letter focuses on three primary messages: 1) The urgent need to halt implementation of the new guidance while engaging a broader range of stakeholders and considering the far-reaching implications of the requirements; 2) Concerns with the across-the-board mandate that consumers secure complete replacement cost, which is not available in all instances; 3) Problems associated with the annual verification process outlined in the guidance. Read the letter here.

May is AI Month at Catalyit

May is dedicated to Artificial Intelligence (AI) at Catalyit. This month, you can learn how to incorporate Generative AI (GenAI) into your agency’s operations.

Catalyit will publish weekly articles covering a wide range of topics, from how-tos to best prectices. Additionally, you can join a four-part webinar series hosted by Steve Anderson to engage in interactive sessions. They will showcase new solutions, helping you get to know the players. Take a look at reviews, listen to the opinions of experts, and more! Learn 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, we discuss the FTC's special open commission meeting on a rule to ban noncompete agreements, and how companies are adopting drone technology to assess property risks.

FTC Announces Special Open Commission Meeting on Rule to Ban Noncompetes

The Federal Trade Commission has announced a special open commission meeting to discuss a potential rule banning noncompete agreements, which restrict employees from working for a competitor after leaving a job. The move aims to promote competition in worker mobility within the labor market. The FTC's initiative follows growing concerns that noncompete agreements stifle innovation and limit job opportunities for workers. Conversely, the rule could significantly harm businesses in their attempt to protect trade secrets, intellectual property and relationships that impact their profitability. The special Open Commission Meeting will be held virtually on Tuesday, April 23, 2024 at 2 pm ET. Read more here.

Home Insurance Companies Increasingly Dropping Customers Based on Images from Drones

Home insurance companies are adopting drone technology to assess property risks, with some using images captured by drones to drop customers. These images provide detailed insights into property conditions, enabling insurers to make more informed decisions. However, this practice has raised concerns about privacy and discrimination. As insurers rely more on drone imagery, there's a growing debate about the fairness and accuracy of these assessments. Critics argue that such practices may disproportionately affect certain demographics or regions, highlighting the need for transparency and accountability in the use of the technology in the insurance industry. 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, we are exploring if AI is a cyber or tech E&O risk and a closer look at the volatile and growing market of personal umbrella insurance.

Underwriters’ Dilemma: Is AI a Cyber or Tech E&O Risk?

Take a look at the challenges and uncertainties faced by underwriters regarding the inclusion of artificial intelligence (AI) in cyber and technology errors and omissions (E&O) insurance policies. Panelists at a symposium highlighted the historical presence of AI but emphasized the lack of industry adaptation to its evolving risks. The difficulty lies in categorizing AI-related risks under cyber or tech E&O policies, compounded by subtle distinctions between technology usage and provision of technological services. Underwriters are urged to delve into clients' operational models to assess potential losses accurately. There are emerging concerns such as liability for AI-generated code leading to data breaches and the use of AI in manipulating audio and video streams for fraudulent activities. Despite uncertainties, there's a consensus that insurers need to adapt to AI-related risks swiftly to support emerging technologies' safe development. Read more here.

Personal Umbrella: A Look at the Volatile and Growing Market

The "2024 Property & Casualty Market Outlook" by Alera Group paints a discouraging picture for the personal insurance market, citing unprecedented losses and unprofitability in homeowners and auto insurance. This situation is affecting pricing and availability, especially in catastrophe-prone areas and states with regulatory constraints on rate adequacy. The personal umbrella market is also feeling the impact, as it follows trends in underlying insurance losses. Despite challenges, there's growing awareness of the necessity of personal umbrella coverage, leading to increased demand. However, the industrywide hard market is putting pressure on this segment, with carriers seeking rate increases due to severe losses from auto accidents and litigation. Agents play a crucial role in detailing the benefits of personal umbrella policies to clients, emphasizing the protection they provide against unexpected events and potential financial liabilities. As rates increase, consumers may consider removing products to offset costs, underscoring the importance of delivering value through personal umbrella coverage. 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, we are discussing things agencies should keep in mind as Tax Day approaches and IIHS' ratings for assisted-driving systems from major automakers.

It's Time for Your Agency's 2024 Tax Check-Up

As Tax Day 2024 looms, independent agency owners are advised to consult their tax experts regarding their current tax structure and potential implications of a future sale. The Tax Cuts and Jobs Act of 2018 brought significant changes, favoring both C-Corps and pass-through entities. However, with the upcoming election cycle and potential changes in the tax code, understanding the implications is crucial. Moreover, the choice between stock and asset sales has significant tax ramifications, with asset sales generally preferred by buyers. Data suggests a significant number of agencies are still structured as C-Corporations, but considering conversion to other structures might be advantageous, particularly as there's a five-year waiting period to realize tax benefits in a sale. Consulting with professionals is recommended to navigate these complexities effectively. Read more from PropertyCasualty360 here.

Tesla, Rivals Get Low Marks for Automated-Driving Technology

The U.S. Insurance Institute for Highway Safety (IIHS) has given poor ratings to Tesla's Autopilot and Full Self Driving technology, along with nine other assisted-driving systems from major automakers, citing a lack of evidence for real-world safety benefits based on crash data. The study contrasts these findings with evidence showing that automatic emergency braking systems significantly reduce rear-end collisions and incidents involving pedestrians. Tesla, despite claiming its technology makes vehicles safer, is under scrutiny by federal regulators investigating nearly 1,000 accidents involving Autopilot. The IIHS emphasizes the absence of federal regulations governing advanced-driver assistance systems and highlights the need for standardized safeguards. Of the systems tested, only Lexus Teammate with Advanced Drive received an acceptable rating. Automakers could enhance safety ratings by adopting existing technology for functions such as driver monitoring or attention warnings. Tesla and other manufacturers are working on improving their systems, but concerns remain regarding their effectiveness and safety. Read more from insurancejournal.com 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.