Yesterday, during the 2024 Big “I" Legislative Conference in Washington, D.C., Sen. Mike Rounds (R-South Dakota), spoke to Big “I" members on the importance of keeping insurance state-regulated, the impacts of inflation, and the inevitability of artificial intelligence (AI).

Sen. Rounds, a former Big "I" member, has served in the U.S. Senate since 2014 after previously serving as the governor of South Dakota. Before his political career, Rounds ran one of the largest independent insurance agencies in South Dakota and understands the valuable role that agents play across all lines of insurance—and in advocacy.

“If you don't come here and tell your story, then somebody else is going to tell it for you," Sen. Rounds told the Thursday morning crowd. “And sometimes, they don't tell it the same way that you would share it, so it's important that you come."

Sen. Rounds is a senior member of the Senate Committee on Banking, Housing, and Urban Affairs, which has primary jurisdiction over insurance issues in the Senate. He is also the ranking member of the Senate Banking Subcommittee on Securities, Insurance, and Investment, and serves on numerous other committees.

Speaking on his role in the Banking, Housing, and Urban Affairs Committee, Sen. Rounds shared that the Committee recently sent a letter to Treasury Secretary Janet Yellen “expressing concern with the Federal Insurance Office and … their effort to impose climate data collection requirements on insurers," he said. “Insurance is regulated at the state level, and it has been for over 150 years—and it has to remain that way."

Sen. Rounds warned that the FIO must understand that “efforts to push insurers and state regulators into potentially adopting certain ESG [environmental, social and governance] strategies all in the name of climate risk mitigation will have real-world impacts on real people that they sometimes forget about," he said. “These impacts would come in the forms of higher compliance costs on insurers and higher premiums on Americans, all as families and businesses across our nation continue to deal with persistent inflation during this time in which energy has driven up the cost of just about everything else."

Energy costs are a key concern as inflation impacts independent insurance agents and their clients, as inflation brings rising loss costs for U.S. commercial property & casualty insurers, according to Fitch Ratings. “You are seeing it in higher prices for rebuilding homes, rebuilding businesses and so forth," Sen. Rounds says. “Overall prices in the last three years are up about 19%. Energy is leading the way and energy impacts everything else. I say that just because it's a focus that as a nation, we have to make sure that energy is at the forefront of what we do long term."

Sen. Rounds is one of four members of a bipartisan group in the Senate seeking to educate their colleagues on AI. While AI is a buzzy term, Sen. Rounds reminded the audience that it is not a new concept.

“The companies that you do business with have used a different form of artificial intelligence, some of which you have absolutely hated," he said. “The computer says, 'You should accept this risk,' or the computer says, 'This is what the pricing ought to be,' and so forth … And as artificial intelligence has become more adept at making decisions or recommending decisions, you've kind of grown up with it—but it's here to stay."

“It is here; it is for real. It's not going to take your place though," Sen. Rounds told attendees. “You are still going to be able to negotiate with underwriters. You're still going to be able to put data in. You're going to go look and see where the biases are at, and you're still going to be the voice for your customer long term."

Sen. Rounds also emphasized the importance of a strong military amidst geopolitical turmoil and energy challenges, and how, while developing cutting-edge technology like AI is key, the Americans who have put on a uniform to protect the country's freedoms should not be forgotten. He invited Legislative Conference attendees who are veterans to stand and be recognized with applause.

Concluding his remarks, Sen. Rounds thanked attendees for advocating for their industry and their clients on Capitol Hill. “I know you could be out making a sale—instead, you're here trying to make things better in this country and making sure that the voice of your profession is heard," he said.

AnneMarie McPherson Spears is IA news editor.