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Of all the issues the incoming 119^th U.S. Congress has on its plate, cryptocurrency might generate the swiftest action and biggest headlines.

And it starts with the agenda set by President-elect Donald Trump, a pair of longtime Capitol Hill veterans said Monday.

“It does seem like Congress is on the verge of making big moves on crypto,” said Peter Roskam, former six-term congressman and lobbyist for the law firm BakerHostetler. “The issue’s ripe to me, there’s a level of familiarity with rank and file, and there is an understanding that this has to be dealt with, that technology is just cascading past things.”

Roskam was joined by Kevin R. Edgar, a former House counsel and partner, government policy for BakerHostetler, on a webinar analyzing the impact of the election results on financial services.

Cryptocurrency is soaring since Trump won the election. He proposed a bitcoin federal reserve during an appearance at the Bitcoin 2024 conference in July and vowed to make the United States the “bitcoin superpower” of the world.

Monday, the world’s leading cryptocurrency rose nearly 5% after Trump again affirmed plans to create a U.S. “bitcoin strategic reserve.” The surge pushed bitcoin to a new record above $106,000.

“It does seem like the incoming president is very forward leaning with this,” Roskam said, “and in light of that, he’s going to put his thumb on the scale and be intentional.”

Crypto convert

Trump once referred to cryptocurrency as a “scam,” but embraced digital assets during his campaign. In his bitcoin conference speech, Trump vowed to make the United States the “crypto capital of the planet.”

The Republican National Committee crafted a pro-cryptocurrency paragraph and added it to the party platform and the Trump campaign announced it would accept donations in crypto.

Trump named a White House czar for artificial intelligence and cryptocurrencies, former PayPal executive David Sacks. He is also nominating pro-crypto Washington attorney Paul Atkins to head the Securities and Exchange Commission.

“The president-elect was very clear that he wants the United States to be a place that crypto wants to be in terms of the innovation,” Edgar said.

Trump is not alone in getting the crypto bug, Edgar added. At least three new senators – Sens. Adam Schiff, D-Calif., Bernie Moreno, R-Ohio and Ruben Gallego, D-Ariz., all reportedly received crypto support during their campaigns, he said.

Meanwhile, Trump is backing World Liberty Financial, a cryptocurrency project that recently received a $30 million investment from Justin Sun, a crypto entrepreneur.

Quick legislation

The first 100 days of a new president’s term are generally reserved for high-priority items. A cryptocurrency bill could be high on Trump’s list, likely reflecting the influence of Elon Musk, who reportedly contributed more than $250 million to his campaign. Musk backs Dogecoin, a less common cryptocurrency which is up more than 18% since the election.

A new bill could resemble one the House of Representatives passed in May to create a new legal framework for digital currencies. That bill passed despite a warning from the SEC that it could create new financial risks.

The Republican-sponsored Financial Innovation and Technology for the 21st Century Act passed in a bipartisan 279-136 vote. Bill supporters in Congress argue that it will provide regulatory clarity and help promote the industry’s growth.

Crypto businesses need to know what the rules are and whether they answer to the SEC or the Commodity Futures Trading Commission, Edgar explained.

“When would they not be subject to either depending on the product that they’re offering,” he said. Cryptocurrency legislation supporters want to “[bring] this marketplace into the U.S. fully so that it’s not looking at other jurisdictions who might have a more advanced regulatory or legal regime.”

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South Carolina became the second state this month to bar an Advantage Capital Partners-controlled life insurer from writing new business after Dec. 31.

“Atlantic Coast Life Insurance Company and Southern Atlantic Re, Inc. have been directed to cease writing all new business, effective December 31, 2024,” reads a statement from Michael Wise, director of the South Carolina Department of Insurance.

“These companies have also been instructed to notify all producers who sell their products and other relevant persons or entities of this directive; and, they are to confirm that they have provided such notice,” the statement adds. “Moreover, in the event the companies do issue any new policies and new annuities after December 31, 2024, they must cancel them and return to the purchaser all money received within five business days.”

South Carolina regulators declined further comment on the circumstances surrounding the decision.

On Dec. 2, Utah Insurance Commissioner Jonathan T. Pike signed an order barring Sentinel Security Life Insurance Co. and a pair of reinsurers from writing new business in the state after Dec. 31.

All of the insurers are owned by Advantage Capital, known as A-Cap.

According to Utah examiners, the three insurers doing business in its state “are in a Hazardous Financial Condition and that such condition presents an immediate and significant danger to the public health, safety, or welfare, and that immediate action is necessary and in the public interest.”

A spokesperson for A-Cap could not be reached for comment Wednesday. The company released this statement following the Utah order:

“A-CAP vigorously disputes the flawed valuation conducted by an unqualified firm. A-CAP stands by its valuation work, which was validated by two highly qualified and independent valuation firms, and is challenging the Order to protect its policyholders, its investors, and the interests of the broader aviation leasing industry participants.”

A-Cap endured a tumultuous 2024.

According to reporting by Semafor, A-Cap sold blocks of life policies to 777’s reinsurance arm, while separately loaning hundreds of millions to 777 Partners itself and various portfolio companies.

In a May lawsuit, Leadenhall Capital Partners, a London-based asset manager, claimed that it provided 777 Partners with more than $600 million in financing. Leadenhall said it later learned that roughly $350 million in assets serving as collateral for the loans either were not in 777’s control or had already been pledged to other lenders.

A-Cap is also named as a defendant, with the firm telling the New York Times that the claims are “baseless.”

Also in May, Sentinel Security and Atlantic Coast Life Insurance, another A-Cap insurer, sued to prevent AM Best from downgrading their financial strength ratings from B++ to B-. That lawsuit was later settled.

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Registered Investment Advisors (RIAs) were the focus of a recent SEC Investor Advisory Committee meeting over mandatory arbitration provisions. Legal professionals, investor advocates, and government officials among other panelists, looked at how these clauses might affect investor rights, justice, and openness. Talks exposed major gaps in data, legislation, and investor safeguards, sparking calls for change and more research.

Christine Lazaro, vice-dean of academic affairs, and director of the Securities Arbitration Clinic at St. John’s University School of Law, began the event by charting the evolution of securities industry arbitration. Under the Financial Industry Regulatory Authority (FINRA), she compared broker-dealer activities with RIAs, which run free from comparable control. Unlike FINRA’s arbitration system, which guarantees uniformity and openness, RIAs sometimes name private arbitration venues including the American Arbitration Association (AAA) or JAMS, where policies and procedures differ greatly.

The SEC Ombuds and assistant director of the Office of the Investor Advocate, Stacy Puente, presented results from a recent study showing that 61% of examined RIA agreements had required arbitration clauses. Of them, 92% mentioned a forum, mostly AAA. But 83% cited AAA’s commercial regulations, usually meant for business-to-business conflicts, instead of consumer-oriented guidelines. These differences generate questions about accessibility and fairness for regular investors.

Arbitration advantages

Kevin Carroll of the Securities Industry and Financial Markets Association (SIFMA) underlined the efficiency, economy, and privacy advantages of arbitration. Arbitration, he said, provides a controlled means for companies to limit expenses, simplifies conflict resolution, and avoids tactical delays. Carroll said, “many disputes would devolve into expensive, protracted litigation without pre-dispute arbitration clauses.”

Adam Gana of the Public Investor Advocate Bar Association, among other investor champions, presented a different image. Arbitration agreements, Gana said, are contracts of adhesion meant to restrict investor rights. He included one-way fee-shifting clauses, class action waivers, and limited conditions that mostly help advisers: damage restrictions. Gana said, citing situations where clients dropped legitimate claims because of excessive arbitration fees, “these clauses often deter smaller claims and burden investors with prohibitive costs.”

Stephen Bray of the Michigan Department of Licensing and Regulatory Affairs emphasized the significance of investor choice. He underlined the inconsistency in state rules and the lack of openness in RIA arbitration decisions. Under Section 921 of the Dodd-Frank Act, Bray urged SEC action to forbid or restrict mandatory arbitration arrangements, therefore promoting investor choice between arbitration and judicial litigation.

One often repeated issue was the dearth of information on RIA arbitrations. Private arbitration fora such as AAA and JAMS do not reveal results or offer aggregated data unlike FINRA’s publicly available arbitration rulings and statistics. This opacity complicates attempts to evaluate the incidence of unpaid awards and the equity of arbitration procedures.

Improving openness

Panelists offered ideas for improving openness. Through changes to Form ADV, a disclosure form submitted with the SEC, Bray proposed mandating RIAs to reveal arbitration provisions and results. While Lazaro stressed the need for investor education about arbitration clauses included in agreements, Puente supported uniform disclosure of arbitration rules.

Panelists pointed out important aspects needing change:

• Advocates called for consumer-oriented arbitration standards to replace commercial rules sometimes used in RIA agreements.
• To guarantee fairness, clauses restricting claims, damages, or locations should be outlawed under Prohibition of Restrictive Terms.
• Public Release of Arbitration Decision: Transparency was judged essential to investor protection, just as FINRA’s broker arbitration records show.
• Many panelists urged the SEC to forbid forced arbitration provisions so that investors may choose their conflict-of-interest forum.

Carroll and other industry officials argued that arbitration rules would help both sides, but detractors pointed out the natural power disparity. “Investors seldom ever negotiate these agreements,” Gana said. Usually hidden in thick contracts, they are provided as take-it-or-leave-it terms.

Although the SEC panel came to no agreement, it recognized the need for more research and regulatory review. While Bray and others argued for stronger investor safeguards, Puente asked the SEC to use its jurisdiction under Dodd-Frank to confront limited arbitration practices.

One thing abundantly clear as the SEC considers its next actions: the argument over required arbitration clauses in investment advising agreements is far from resolved and has significant ramifications for individual investors and the financial advisory sector.

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Some stakeholders are concerned California’s new best-interest insurance sales bill – Senate Bill 263 – could bring chaos both to consumers and agents operating in the state come Jan. 1.

Under Senate Bill 263, agents who sells cash value life insurance or annuities in the state of California will be required to undergo training to ensure compliance with new regulations. These regulations are designed so that agents can only sell life and annuity products in the consumer’s best interest.

The trouble is many insurance agents do not seem to be aware of the new training requirements, according to Cynthia Davidson, director of content and compliance at ExamFX, an insurance certification institute.

“There’s so much confusion out there. There hasn’t been a lot of notification… We had a couple of polls we did on our webinar asking, ‘Did you know about this training requirement?’ and people were like, ‘Nope,’” she said.

At the same time, some consumer groups still feel strongly that the bill will do more harm than good. In an interview with InsuranceNewsNet, Brian Brosnahan, co-founder and executive director, the Life Insurance Consumer Advocacy Center, slammed Senate Bill 263 as an “anti-consumer bill” that will only lead to more customer complaints in the future.

“The bill has a lot of problems. We think it may lead to more complaints…to the extent there are some unscrupulous agents who may use the law to unfairly gain the confidence of consumers,” he said.

The California Department of Insurance did not reply to requests for comment up to the time of this writing.

New training requirements

Davidson explained there are three components to the new training requirements that incorporate California’s new best-interest standards:

1. To sell cash value life insurance: New agents registered after January 2024 must complete four hours of training by January 1, 2025.
2. To sell annuities: All agents — existing and new — must complete a new eight-hour training course on the new standards by July 1, 2025, and a four-hour updated refresher course before their next license renewal.
3. To sell variable life insurance: All agents must complete two hours of new training before their next license renewal.

“So, say your license is renewing in March of 25. You will have to do the four-hour course first, and then you have until July 1st to do the eight-hour one,” Davidson explained.

She said the requirements are not too onerous for existing agents, who may only have to complete the two annuity courses. But, it could be “a big deal” for new agents, who potentially have to complete 16 hours of training in the few remaining weeks of December and during the holidays or face hiccups in their career.

“It’s all very last-minute, and it’s also why everybody’s kind of racing to the finish line here,” Davidson said.

Agents in the dark

Davidson acknowledged that the CDI issued a notice about the new requirements and their respective deadlines in June. But, she suggested “that might not have gotten the word out quite as much as they think” and many agents may not realize until it’s too late.

“It does worry me because there sure seems to be a lot of people who don’t know anything about this… My prediction, for what it’s worth, is January is going to be ‘lit’ and all our phones are going to be blowing up. The Department of Insurance, I’m sure their phone’s already blowing up,” she said.

Brosnahan, however, minced no words in suggesting all agents should know about the requirements before they start selling insurance and annuity products.

“Good agents ought to be aware of this… If there are some agents who don’t pay enough attention to what’s required in their profession, who are not sufficiently on top of this so that they can’t sell annuities, then maybe consumers will be better off, not worse off,” he said.

Consumer impact of SB 263

Davidson said new standards mean Californian consumers will have a better-informed and more-recently-trained force of agents who understand the ethical implications of their sales.

However, she noted that confusion over requirements could cause delays with some people trying to get insured over the next few months, and the benefits of SB 263 seem unclear.

“California will say that consumer protection is the reason we did this, but they have not specified what beneficial outcomes they think are going to get as a result. It has not been specific, just ‘better consumer protection,’” she said.

Brosnahan granted, however, that SB 263 is “a little bit better in very small respects.” For instance, he noted the fact that insurers must establish supervision systems, producers must make recommendations to the consumer in writing and disclosures must be provided at the time of recommendation rather than the time of sale as positives.

Due diligence urged

Davidson emphasized that it’s prudent for insurance agents and companies to comply with the new regulations, however they may feel about it.

“You may not have known that this was coming [but] it’s not worth getting mad about it,” Davidson said. “Just do the training. Just get it over with… California is going to, I think, be serious about enforcing it,” Davidson said.

Brosnahan, meanwhile, suggested insurance companies prepare for a possible influx in complaints.

“I would urge insurance companies to beef up their supervision and complaint staffs, because the bill kind of invites agents to mislead consumers. It’s not a violation of SB 263, but it could very well be violations of other law,” he said.

ExamFX is an American educational institution that provides education, training and certification courses for insurance and securities. It was founded in 1996 and is based out of Leawood, Kansas.

The Life Insurance Consumer Advocacy Center is a non-profit consumer organization founded in 2020 and based in Pleasant Hill, California. It advocates for stronger regulations and consumer protection laws related to life insurance and annuities.

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UnitedHealth Group will pay $69 million to settle a class-action lawsuit brought by an employee alleging that the health care giant cost workers millions in lost gains by forcing them into lower-performing 401(k) options.

The settlement news comes as UnitedHealth continues to deal with the fallout from the brazen daylight shooting death of UnitedHealthcare CEO Brian Thompson on Dec. 4. The incident unleashed a torrent of public vitriol toward health insurers for high costs and claim denials.

The 401(k) lawsuit dates to 2021 when lead plaintiff Kim Snyder alleged interference by the company’s CFO to retain certain Wells Fargo funds within the 401(k) plan. The bank was a large customer for UnitedHealth Group, Snyder claimed, including for coverage sold by its large UnitedHealthcare health insurance business.

The law firm Sanford Heisler Sharp McKnight filed the lawsuit on behalf of over 150,000 individuals who were invested in the Wells Fargo Target Fund Suite.

The Wells Fargo fund was “one of the worst-performing target date options in the entire market,” the law firm claimed. UnitedHealth’s decision to keep the Suite as the default investment for the Plan for over a decade violated fiduciary duties of prudence and loyalty under the Employee Retirement Income Security Act (ERISA).

The matter was certified as a class action in February 2022.

In order to justify keeping the poorly performing Wells Fargo Target Fund Suite, Snyder’s attorneys alleged that UnitedHealth “kept its decision-making secret and threw out key findings that the plan’s own Investment Committee had made, while abandoning the plan’s written criteria for screening investments.”

‘Hand in the cookie jar’

Earlier this year, a Minneapolis judge ruled that a jury could conclude, based on evidence discovered during the case, that the company had been caught with its “hand in the cookie jar.”

“Over the course of three and a half years of litigation, plaintiff Kim Snyder … bore the particular burden of being the only class representative in the action,” Charles Field, an attorney with Sanford Heisler Sharp McKnight, said in a statement to the Minnesota Star Tribune. “Ms. Snyder’s commitment to this case was the means of obtaining an outstanding outcome for the plan and the class.”

UnitedHealth Group said in a statement that the company’s 401(k) plan fiduciaries have always acted in the best interest of those using the plan to save for retirement, the paper reported.

“We strongly deny any allegations to the contrary,” UnitedHealth Group said. “If approved by the court, this settlement will enable all parties to put this matter behind them and move forward.”

On March 12, the court denied most of UnitedHealth’s motion for summary judgment and ordered the case to proceed to trial. Judge John Tunheim of the U.S. District Court of Minnesota still needs to sign off on the settlement.

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The political pushback against Environmental, Social, Governance (ESG) investing continues as two more states last week took action to quash the incorporation of progressive factors in financial decision-making.

Ohio legislators passed a bill to limit the state’s five public pension funds from pursuing investments influenced by social and environmental policy. The bill also aims to ban funds from engaging in shareholder activism. It awaits a signature from the state’s governor, Mike DeWine.

In Oklahoma, the state’s attorney general appealed to the Sooner State’s Supreme Court to reinstate an anti-ESG law that was struck down by a lower court. The so-called Oklahoma Energy Discrimination Act would prohibit public pension funds and state contracts from engaging with financial firms accused of discriminating against the oil and gas industry.

Joining a growing list

The two states join an ever-growing list of mostly Republican-controlled jurisdictions that have turned against ESG investing, labeling it an activist and left-wing (see “woke”) practice that is more aimed at advancing ideological agendas over maximizing shareholder value.

At last count, 11 states (Texas, West Virginia, Oklahoma, Florida, Kentucky, Missouri, Arizona, Idaho, North Dakota, Utah, and Ohio) have passed anti-ESG legislation, with eight states (Indiana, Wyoming, Iowa, South Carolina, Arkansas, Tennessee, Louisiana, and Montana) considering or have pending anti-ESG bills.

These legislative efforts reflect a broader national debate on the role of ESG considerations in public finance and corporate governance, with significant variations across state lines influenced by political, economic, and ideological factors.

In October, U.S. Sen. Bill Cassidy, (R-LA), introduced a bill to prohibit asset managers from favoring environmental, social, and governance factors when evaluating people’s retirement plans.

Cassidy, the ranking member of the Senate Health, Education, Labor, and Pensions Committee, said potential investments should be evaluated only with regard to financial performance and not on progressive factors.

‘Best return for their retirement’

“Asset managers should prioritize helping Americans achieve the best return for their retirement, not funneling their clients’ money to fund a left-wing political ideology,” Cassidy said.

Critics also contend that ESG mandates can impose more costs on companies that could lead to higher prices for consumers and reduced profitability.

But advocates say the call against ESG investing ignores both the realities of current world problems but also the broad potential benefits ESG investing can produce.

Paul Polman, the former CEO of Unilever, and co-founder of IMAGINE, an activist foundation that promotes ESG implementation and Sustainable Development Goals, says such finance is integral to tackling the climate crisis.

“88% of investors globally place climate change risks at the top of their portfolios concerns,” he says on his website.

Moreover, Polman claims that 81% of the ESG-driven investments have outperformed their benchmarks.

“Very few alternatives to ESG investments have outperformed,” he said.

He stressed that companies that focus on the social side of investing are increasingly rewarded by the financial community.

“The flip side is that financial markets are starting to punish companies that do not take care of people in their value chain,” he said.

Wayne Visser, a professor and author specializing in sustainable transformation, says there is extensive evidence for a strong business case for sustainability.

“I summarize this as 10 Rs,” he writes. “Investing in sustainability reduces risk, improves reputation, builds resilience, increases resource efficiency, anticipates regulation, ensures recruitment and retention of talent, boosts revenues, increases returns, stimulates research & development, and clarifies a company’s reason for being.”

Nevertheless, the anti-ESG movement is expected to pick up steam under the new Trump administration.

States like Texas and Florida have enacted laws restricting state contracts or pension investments with firms perceived to boycott fossil fuels or adopt ESG principles. Others have withdrawn funds from major financial firms promoting ESG initiatives, arguing these policies are economically and ideologically misaligned with state interests.

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Rep. Lori Chavez-DeRemer, nominated by President-elect Donald Trump to head the Department of Labor, is being viewed with skepticism by a financial services industry that wants efforts to extend fiduciary duty to go away for good.

Chavez-DeRemer, R-Oregon, has a sketchy history with the issue. As member of the House Committee on Education and the Workforce, she was the only Republican to vote against a Congressional Review Act resolution to strike down the fiduciary rule.

But more than likely, the DOL will not pursue the matter, a panel agreed this week.

“It’s a little hard to believe she’s going to be passionate about it,” said Jason Bortz, a senior vice president and senior counsel at Capital Group, the investment manager to the American Funds. “But it kind of suggests to me that they will let the litigation roll forward, at least in the Fifth Circuit Court of Appeals, where it is most watchers give that rule very small odds of surviving.”

He spoke this week during a Capital Group webinar titled, “Legislative and regulatory changes for the 401(k) industry.” Make no mistake about it, the panel agreed, the Trump win over President Joe Biden is “a very welcome development for the investment industry,” as Bortz put it.

The panel repeatedly stressed an apolitical stance with their analysis.

A fiduciary rule repeat

The state of the fiduciary rule – officially known as the Retirement Security Rule in its present version – is remarkably similar to when Trump first took office in 2016, Bortz noted. That is, tied up in court.

Then, the Obama administration fiduciary rule was headed to the Court of Appeals for the Fifth Circuit, which vacated the rule in 2018. Two rules and eight years later and it’s the RSR currently in federal court.

The two cases against the RSR are: The Federation of Americans for Consumer Choice filed its lawsuit May 2 in the Eastern District, which was heard by Judge Jeremy Kernodle. The group of trade associations followed with its lawsuit in the Northern District.

Both cases have been stayed. It’s not just a matter of letting the RSR die, Bortz said.

“If the Biden fiduciary rule is revoked, I think the Trump Department of Labor is going to have to think about whether to say anything in this space,” he said. “Because … without any guidance, rollover recommendations would be non-fiduciary in the ordinary course, and I’m not totally sure they’re going to be willing to have that be the rule.”

Any more SECURE?

Among other issues that could resurface in a Republican-powered Congress, the SECURE Act is a good bet, the panel agreed. For starters, a “technical corrections bill” to fix some minor things in SECURE 2.0 is expected to easily pass Congress, Bortz said.

“I wouldn’t get too hot and bothered about that,” he said. “It’s going to happen eventually, and it will be retroactive.”

The original SECURE Act of 2019 was signed into law by Trump, and its successor, SECURE 2.0, passed in 2023. Together, the laws include dozens of changes, taking effect on staggered timelines, to remove the barriers to annuity sales in retirement plans and make it easier for Americans to save for retirement.

Auto-enrollment is the next big SECURE feature to become law. Starting in 2025, all new 401(k) and 403(b) retirement plans established after Dec. 29, 2022, must include an auto-enrollment feature, meaning eligible employees will be automatically enrolled in the plan at a minimum contribution rate, usually around 3%, unless they choose to opt out.

“It’s kind of a remarkable thing,” Bortz said. “You may feel like SECURE 2.0 is old news, but it’s actually kind of continuing news.”

The industry has visions of SECURE 3.0, a bill package that would go further to strengthen retirement savings. But Bortz does not expect any momentum for it anytime soon.

Some ideas being discussed include making it easier and faster to do rollovers out of retirement plans, he explained. Also, how to extend retirement savings to independent contractors, such as Uber drivers.

“it’s very much in the ideation phase,” Bortz stressed. “It’s certainly not going to happen this year, and certainly not going to happen next year. It’s going to be a while.”

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New legislation from Sen. Ron Wyden, D-Ore., would reclassify and tax life insurance primarily used by the ultra-wealthy.

Wyden, chairman of the Senate Finance Committee for another two weeks, has long had private placement life insurance in his sights. He released a draft proposal this morning, Bloomberg reported, to reclassify private placement life insurance polices and similar annuities as “private placement contracts” if they meet certain criteria.

In February, Wyden released a report on PPLI as a tax shelter for the ultra-wealthy. The report, which characterizes PPLI as a “buy, borrow, die” tax shelter, is highly critical of the uses and tax advantages afforded to the purchasers of such products that are not available to the less affluent.

“The investigation, the first of its kind into PPLI, found that the domestic PPLI industry is now a tax shelter made up of at least $40 billion in policies held by only a few thousand individuals, who have net-worths reaching into the hundreds of millions or billions of dollars,” a news release claimed.

It is unclear what will happen with Wyden’s bill with the new Senate in the hands of incoming majority leader-elect John Thune, R-S.D.

Marc Cadin, CEO of industry trade group Finseca, said his members are strongly opposed to any changes in PPLI.

“We’ve had many meetings with Senator Wyden and his team to emphasize the importance of preserving the core tax treatment of life insurance, and we strongly disagree with the legislation being proposed. This legislation is an attack on all forms of permanent life insurance and, by extension, an attack on holistic financial planning,” Cadin said in a statement. “We look forward to working with the new Congress and the Trump administration to advance policies to move our country forward rather than raising taxes on life insurance.”

A matter of tax fairness

Titled the “Protecting Proper Life Insurance from Abuse Act,” Wyden’s bill would also impose reporting requirements for companies that sell PPLI policies, with fines starting at $1 million for those that fail to report.

Wyden has claimed that his quest to rein in PPLI is a matter of tax fairness. The IRS is “largely unable” to enforce investor control rules in place to prevent the abuse of tax-advantaged financial products like PPLI, his committee said in the February news release.

At the moment, there is no requirement to report ownership of PPLI on a tax return, “allowing wealthy investors to use PPLI to shield lucrative investments in alternative assets from scrutiny by the IRS,” the release said.

“I’m a strong defender of life insurance as a source of financial security for hardworking American families and retirees, but that’s not what’s going on with these tax-dodging private placement policies that are available only to the ultra-wealthy,” Wyden said. “When you subject these policies to even the slightest bit of scrutiny, it’s clear that this is just a tax shelter for the investments of the mega-rich masquerading as life insurance.”

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There is no precedent to what the U.S. could see in health care under a second Trump presidency, an industry expert said.

Paul H. Keckley is managing editor of The Keckley Report, a health care policy analyst and advisor to health care organizations. He gave a preview of what the incoming Trump administration could mean for the U.S. health care system during a recent webinar.

President-elect Donald Trump and the 119^th Congress have a short window of time to enact any change, Keckley said. That’s because it will probably take until April for the Senate to confirm Trump’s nominees to lead key agencies and then Congress will turn its attention to the 2026 midterm elections.

“They have a short window to do a lot of stuff because the activities of 2025 will be the Campaign 2026 narrative,” he said. “That means there’s not a lot of big legislation they can pass – not just because they have a narrow margin in both houses but because it’s hard to pass big legislation.”

But executive orders from the White House and administrative directives from agency heads can bring about some changes in health care without Congress passing legislation, Keckley said.

He predicted Trump would start by changing “the low hanging fruit” – issues that could be enacted quickly through executive orders or administrative rulings by federal agencies. These orders and rulings might be challenged in the court “but at least would set the agenda for a minimum of two years if not four.”

Low hanging fruit, Keckley said, includes issues that would have populist appeal.

An intent ‘to clean house’

“I think what’s interesting about the Trump administration and Trump health care team is disruption is raw meat – they like it. They believe the health care system is deceptive, somewhat corrupt, certainly a system of cronies. So Trump’s avowed intent is to clean house – he’s putting in a different set of cronies.”

Keckley noted that Trump’s nominees in four of the top five health care positions are physicians. “But none of those has a day job seeing patients.  All of them have been in private sector activities, all of them have been in some of the political antivax rhetoric of the past four years. It has been interesting to see him assemble this team, which has as its true north ‘we’re going to shake things up.’”

He said he believes Trump will revisit a proposal to remove the ban on expanding the number of physician-owned hospitals in the U.S. The Affordable Care Act prohibited any physician from building or owning a hospital and limited the growth of any physician-owned hospital that was already in operation.

Commissions expected to be named

“Trump will take the position that we need competition and hospitals don’t have the right to control that. And that will obviously be challenged. We’ll see a list of reviews, we expect some commissions to be named to study the issue.”

Keckley predicted Trump will appoint commissions to examine several aspects of the U.S. health care system.

“Commissions and task forces are great ways to say ‘I’m working on something’ without having to do anything. You appoint some folks, you create a commission, you give them some legislative staffers and they produce a report typically too late to do much about it in the current election cycle but you can say, ‘Look what we did.’”

Commissions could possibly examine the impact of hospital consolidation on health care costs, the approval process for new prescription drugs and the structure of the health insurance industry, Keckley said.

“For the past four years, we have been in a period where the wind and the momentum were at the back of the insurance industry and a lot of headwind faced the provider side. But Trump will take the position of ‘I can open the insurance market for you but I will allow for some short-term policies,’” he said.

Keckley predicted the Trump administration will push to provide a private option for veterans’ health care, much like how Medicare Advantage created a private option for senior health care.

As for Medicare Advantage, Keckley predicted the Trump administration will provide incentives for MA carriers to make more zero-premium policies available in the marketplace.

The first Trump presidency came on the heels of the ACA’s enactment. Keckley looked at what a second Trump administration will mean for the health care law.

“The ACA did a lot of things that Trump promised to get rid of when he first came into office,” Keckley said. “But he found that there was more about the ACA that people liked than what they disliked – things such as coverage for those with pre-existing conditions, coverage for those under 26.”

But Trump 2.0 will allow “every governor and every agency in health care in the federal government to enact changes which, at worst, end up in court but still draw attention to their intent to fix a problem, with the only caveat to that being whoever comes into the role next time can throw it out.

“There is no precedent to what we will see in the next 18 months.”

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Centene Corp. CEO Sarah London acknowledged “unprecedented times” Thursday morning as the health care giant held an abbreviated virtual investor day eight days after UnitedHealthcare CEO Brian Thompson was gunned down in New York City.

Thompson was on his way to a UnitedHealth investor day in Manhattan on Dec. 4 when 26-year-old masters honor student Luigi Mangione shot him several times. Police arrested Mangione Tuesday, and charged him with murder and various firearms offenses.

The shooting revealed an underlying societal anger toward health insurance companies over increased costs and dwindling coverage. In response, many health insurers are removing photos and personal information about their executives. Centene switched to a virtual investor day earlier this week.

“It would be an understatement to say we are operating in unprecedented times,” London said. “2024 has been a long, complicated and now tragic year for the industry.”

London then led a moment of silence for Thompson, who she called “a good man and father, a great leader, a thoughtful competitor and a friend.”

Centene abbreviated the investor day schedule due to the virtual format, but executives promised a full traditional event in the “next time we are all together in person,” said Jennifer Gilligan, senior vice president of finance and investor relations.

Two big opportunities

London briefed investors on “two exciting growth opportunities that sit right on top of our core platform of Medicaid, Medicare and marketplace.” They are:

1. Dual-eligible members in Medicare and Medicaid. With more than 750,000 unaligned dual members, “we see significant opportunity to advance care management, improve member engagement and experience and generate cost savings for duals alignment,” London explained.

“This is why we have been refining our Medicare footprint to overlap more closely with our Medicaid presence.”

Centene is more focused on low-income “complex populations” than when it laid out its 2022 strategic plan, London said. In April, the Centers for Medicare & Medicaid Services published a rule making it mandatory in 2030 that the carrier provide Medicaid benefits for an individual who also Medicare services.

“What provides Centene with an advantage in this market, footprint, focused and far-reaching relationships across our markets,” London said. “With the largest Medicaid footprint in the nation, we have proven infrastructure ready to serve more members than any other player.”

2. Individual coverage health reimbursement arrangements. ICHRA plans allow employers to offer a tax-free stipend to employees in lieu of health insurance. With a stipend, employees can shop on the individual marketplace and choose the insurance plan that works best for them.

“We see meaningful opportunity for ICHRA and further dislocation of group insurance for a number of reasons, starting with the fact that many employees today don’t want the same options their parents had,” London said. “As baby boomers move more fully into Medicare coverage, the commercial market is increasingly made up of consumers who expect transparency, customization, choice and convenience in everything they do.”

During the recent open enrollment period, Centene launched ICHRA plans in six states.

Earlier this month, Centene announced a strategic partnership with Thatch, an online ICHRA platform, Allstate Health and QuickBooks. The collaboration introduces more than half a million QuickBooks employer groups to ICHRA and the Ambetter Health pretax health exchange health plans, London noted.

2025 financial goals

In an accompanying news release, Centene announced its 2025 financial goals:

• Total revenues of $166.5 billion to $169.5 billion.
• Premium and service revenues of $154.0 billion to $156.0 billion.
• GAAP diluted earnings per share of greater than $6.19.
• Adjusted diluted EPS of greater than $7.25.
• Health benefits ratio of 88.4% to 89.0%.
• Selling, general and administrative expense ratio of 8.1% to 8.7%.
• Adjusted SG&A expense ratio of 8.1% to 8.7%.
• Effective tax rate of 21.5% to 22.5%.
• Adjusted effective tax rate of 22.0% to 23.0%.
• Diluted shares outstanding of 491.0 million to 494.0 million.

“Centene is a mission-driven organization, dedicated to delivering high-quality outcomes for more than 28 million members, many of whom are among the nation’s most medically complex and historically underserved populations,” London said in the release. “Over the last three years we improved our core operations and invested in the experience of our customers and providers, all while delivering on our financial commitments.”

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