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Federal Agencies Announce Shift in Short-Term Health Insurance Enforcement

Federal Agencies Announce Shift in Short-Term Health Insurance Enforcement

On August 7, 2025, the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury announced they are reconsidering the regulatory definition of short-term, limited-duration insurance (STLDI) through a formal notice-and-comment rulemaking process.

The 2024 final rules amended the definition of STLDI for purposes of its exclusion from the definition of “individual health insurance coverage” under the Public Health Service Act, the Internal Revenue Code, and the Employee Retirement Income Security Act. STLDI is generally exempt from the individual market requirements of the Public Health Service Act and the Affordable Care Act.

Consistent with Executive Order 14219, the departments will review the regulation to determine if amendments are necessary. Until any new rules are finalized, the agencies will not prioritize enforcement actions for violations related to failing to meet the 2024 definition of STLDI, including its notice requirements.

HHS has encouraged states to take a similar enforcement approach. States adopting the federal approach or applying their own definitions of STLDI under state law will not be considered out of compliance with federal enforcement standards during this period.

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Atmospheric Rivers Decrease on West Coast, Intensify in Eastern U.S., Study Finds

Atmospheric Rivers Decrease on West Coast, Intensify in Eastern U.S., Study Finds

A new study published in Nature reports a shift in the behavior of atmospheric rivers — long, narrow bands of concentrated water vapor in the atmosphere — over the past four decades. Researchers found that wintertime atmospheric rivers are becoming more frequent and intense in the Eastern United States while declining in frequency over the West Coast.

Key Findings

The research team, led by former NOAA scientist Wenhao Dong, analyzed 40 years of water vapor, precipitation, and wind speed data from 1980 to 2020. They found:

  • Eastern U.S. increase: Atmospheric river frequency rose nearly 5% per decade, with the South experiencing the largest increases. Parts of Mississippi, Alabama, and Tennessee saw average atmospheric river rainfall rates rise by up to 2 millimeters per day per decade. In Georgia, extreme rainfall rates rose by almost 4 millimeters per day per decade.
  • Western U.S. decrease: Atmospheric river frequency fell nearly 4% per decade in Washington, Oregon, and California. Portland, Oregon, recorded a decline of more than 2 millimeters per decade in average atmospheric river rainfall rate.

If current trends continue, parts of the Southeast could see average rainfall from atmospheric rivers double within 20 years.

Impacts and Recent Examples

While less studied in the East, atmospheric rivers have already caused notable events. One storm in late 2024 left more than 80,000 homes without power in New England. Historically, the West has experienced significant impacts from these systems, with about 80% of all West Coast flood damage linked to atmospheric rivers — costing Pacific states roughly $1 billion annually.

Driving Factors

The formation and movement of atmospheric rivers depend on tropical water vapor sources, jet streams, and regional weather patterns. The study examined several “modes of variability,” such as:

  • La Niña–like Pacific conditions
  • Shifts in the East Asian Subtropical Jet Stream
  • Atlantic warm-water patterns feeding Gulf moisture

In the West, cooler East Pacific conditions and altered jet stream paths have reduced moisture flow from the tropics, leading to fewer atmospheric rivers. In the East, warmer Atlantic conditions are increasing moisture transport from the Gulf of Mexico, fueling stronger events.

Data Limitations and Definitions

Researchers caution that varying methods for identifying atmospheric rivers — based on moisture content, persistence, transport patterns, and shape — can produce different results. Some detection algorithms may classify certain Gulf of Mexico moisture flows as atmospheric rivers that others might not.

Christine Shields, a project scientist at the National Center for Atmospheric Research, noted that despite classification differences, the study’s method for linking modes of variability to atmospheric river changes was robust.

Long-Term Understanding

The authors emphasize that while these trends have been observed, more historical data — potentially spanning centuries — would be needed to fully determine how natural variability and external factors, such as human-induced climate change, are influencing these patterns.

Understanding the role of atmospheric rivers in regional precipitation is important for planning. Water resource managers, for example, can use such information to prepare for both flood risks and water supply needs.

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Longtime Insurance Leader Kevin H. Kelley Passes Away

Longtime Insurance Leader Kevin H. Kelley Passes Away

Kevin H. Kelley, a respected figure in the insurance industry and retired vice chairman of Liberty Mutual’s Global Risk Solutions business, has passed away.

“We were deeply saddened to learn of Kevin’s passing and extend our heartfelt condolences to his family,” said Liberty Mutual Chairman and CEO Tim Sweeney.

Mr. Kelley’s career spanned decades, marked by leadership roles that shaped the insurance landscape. He joined Lexington, the surplus lines unit of American International Group (AIG), in the early years of his career and was named CEO in 1987 at just 36 years old. Under his guidance, Lexington became a leading excess and surplus lines insurer in the United States.

In 2008, Mr. Kelley took on the role of chairman and CEO at Ironshore, a newly launched specialty insurer, leading the company until its acquisition by Liberty Mutual in 2017.

A Boston native, Mr. Kelley grew up in West Bridgewater, Massachusetts, and attended Cardinal Spellman High School in Brockton, where he later served as chairman of the board of trustees. He earned his business administration degree from Boston University in 1972.

In recognition of his contributions to the industry, Mr. Kelley was honored with the 2020 Business Insurance USIA Lifetime Achievement Award.

“Throughout his long and distinguished career, Kevin demonstrated exceptional leadership and innovative thinking. His legacy will continue to inspire and influence many within Liberty Mutual and across the industry for years to come,” Sweeney added.

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InsurTech Funding Surpasses $60B, AI Investment Dominates

InsurTech Funding Surpasses $60B, AI Investment Dominates

The global InsurTech sector has reached a new funding milestone, with more than $60 billion raised and invested since 2012, according to Gallagher Re’s latest Global InsurTech Report. While significant, the figure is overshadowed by the scale of investment in artificial intelligence (AI), which has attracted $1.6 trillion globally since 2013, based on a Stanford University study.

AI’s Growing Role in Insurance

Andrew Johnston, global head of InsurTech at Gallagher Re, noted that while some skepticism about AI remains—particularly in reinsurance—it is emerging as a transformative force. The report found that 57.1% of InsurTech deals in the second quarter of 2025 involved AI-focused companies.

Johnston emphasized that InsurTech firms must showcase effective use cases for AI to benefit consumers and remain competitive. AI tools, the report said, are proving valuable for efficiency gains and automating repetitive tasks, allowing professionals to focus on higher-value work.

Venture Capital Trends and Competition

The first quarter of 2025 saw a rise in venture capital and private equity activity, with Silicon Valley investors accounting for one in five global InsurTech deals. Gallagher Re’s report links this to the region’s access to top-tier tech talent and investor optimism about AI’s potential returns—factors that could lead to funding levels similar to those seen in 2020 and 2021.

Infrastructure, Talent, and Ethics in AI Adoption

Freddie Scarratt, global deputy head of InsurTech at Gallagher Re, stressed the importance of building robust data infrastructure and governance frameworks to handle AI’s demands. He said investing in AI talent—through hiring, training, and partnerships—will be key, as will addressing AI-related risks.

The report also highlighted the need for fairness in AI-driven underwriting and claims decisions, ongoing engagement with regulators, and collaboration with academic and research institutions to develop best practices.

AI as an Augmenting Force

Gallagher Re’s analysis concluded that AI will not replace the expertise of human underwriters, actuaries, or claims professionals but will enhance their capabilities. Effective integration of AI into processes such as risk assessment, pricing, claims management, and capital allocation is expected to become a competitive differentiator, particularly for property reinsurers, in the coming years.

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