During the February 2021 AAIS Pulse newsmagazine, AAIS VP and General Counsel Robin Westcott was joined by Faegre Drinker Partner Patrick Hughes to examine the impact of the Biden Administration and recent legislative actions on the insurance industry.

Commenting on the 2020 election results, Patrick Hughes noted that the new Biden Administration and a shift to a Democratic-controlled Congress, translates into a “fundamental assumption that there’s going to be an increased appetite to take a more active role in insurance; there’s potential for legislation coming out of Congress.”

Since insurance is state regulated, many changes in the federal government are likely to have a trickledown effect sparking reexamination of state policies. However, the impacts to come are hard to predict, as Mr. Hughes emphasized that both the House and the Senate majorities are narrow.

Mr. Hughes identified the COVID-19 Relief Bill as the current priorities in D.C. There’s been substantial activity on both pieces of legislation and it’s now up to larger committees to pull all of the backers together.

The Biden Administration also seeks to address the severe infrastructure problems in the country – which go far beyond roads and bridges. As Hughes explained, “We tend to think of infrastructure the way we thought of it when we were in high school – a road, a building, a bridge… now we’re talking about data and the infrastructure and architecture that surrounds that. “Insurers want good infrastructure; everyone wants good infrastructure, but there also are potential investment opportunities in infrastructure. There are private sector roles in these infrastructure projects that could create opportunities to do good and address issues like transportation equity, climate change, green energy, and data.

The Biden Administration made a big initial push to address climate change with a far-reaching Executive Order. “It laid down a marker and set in place very specific initiatives that we’re going to see in his infrastructure proposal,” according to Mr. Hughes. Regardless of what you believe about how we got to where we are today, Mr. Hughes states that “You still have a responsibility to be good stewards of the environment.” This is applicable to insurers, because the goal of insurance is to help customers navigate their own personal risk. And if insurers can help to mitigate climate change and environmental issues, they’re ultimately helping their customers.

Like climate change, racial justice is another topic that the Biden Administration was early to mark as a top priority. Biden signed an Executive Order that advanced racial equity and supported underserved communities at a federal level, and simultaneously addressed the federal government’s history of discriminatory housing practices. How does this relate to insurance? Mr. Hughes predicts there will be a lot of conversations within states about what constitutes discrimination and what constitutes ‘proof’ of discrimination. “This is an issue that we have to attack head on, as a human community, as a business community,” Mr. Hughes said.

For a number of priorities,” Mr. Hughes predicts minimal activity and minimal legislation in the near-term due to the COVID-19 crisis and the priorities of the Administration and Congress.