👋 Good Morning. Welcome to this week’s recap. The news, trends, and training Producers need—without the boring.

😀 Vibe Check: PBMs just got cracked over the head by regulators, cannabis is one step closer to going mainstream, and AI agents are filing insurance claims. No big deal.

☕ Grab your coffee, Zyn it to win it, and let’s get this party started.

STORY OF THE WEEK

Uncle Sam Just Landed a Haymaker on Drug Pricing

On Wednesday, the FTC secured a landmark settlement with Express Scripts that could save patients up to $7 billion over the next decade on medications like insulin.

The settlement forces Express Scripts to completely restructure their business model:

• Base patient out-of-pocket costs on net prices instead of inflated list prices

• Stop preferring expensive drug versions over identical cheaper alternatives

• Provide mandatory drug-level transparency reporting to plan sponsors

• Transition to fairer payment models for community pharmacies based on actual acquisition costs

• Reshore over $750 billion in purchasing activity back to the United States

The backstory for unfamiliar P&C pros: Express Scripts is a PBM, which means they're the middleman sitting between drug manufacturers, insurance companies, and pharmacies. Drug manufacturers would set high list prices on medications—say $300 for insulin. Then they'd offer Express Scripts massive rebates to secure preferred formulary placement. Express Scripts would pocket a portion of those rebates as profit. Everyone involved made money on the spread. Except patients whose copays and coinsurance were calculated based on that $300 list price saw none of the discount. They paid full freight while the middlemen negotiated in the shadows.

This has been standard operating procedure in the PBM world for years. The FTC's September lawsuit against Express Scripts, Caremark, and OptumRx alleged they created a system that rewarded high list prices and punished transparency, all while vulnerable patients struggled to afford life-saving medications.

So what does this mean for Benefits Brokers? This settlement should be at the top of your meeting agenda for every conversation you have this year.

Most plan sponsors have limited visibility into what their PBM is actually doing. They see "negotiated rates" and "rebate sharing" but rarely understand the mechanics or the margin.

The forced transparency measures create an opening. Your clients should immediately be asking their PBMs for drug-level reporting, questioning rebate guarantees versus pass-through arrangements, and demanding plan designs that base member costs on net prices rather than inflated list figures.

The community pharmacy provisions matter too. Fairer reimbursement models mean better network stability and improved access for members who rely on local pharmacies.

PBMs have operated with minimal oversight for decades, and that era is ending. The FTC just demonstrated they're willing to force structural changes, not just levy fines. Your clients need to understand their pharmacy benefit arrangements before regulators or lawsuits force the conversation. This settlement gives you the credibility to start asking uncomfortable questions about contracts that were "negotiated" in a fundamentally rigged market.

The window to get ahead of this is now.

Go forth and conquer, Benefits Bros!

NEWS OF THE WEEK

🤖 Reddit for Robots Becomes Cyber Security Dumpster Fire

A developer launched Moltbook last week, a social network exclusively for AI agents. Within days, 770,000 bots were swapping code and complaining about their humans. Elon called it the "early stages of singularity." Security researchers called it a cyber security dumpster fire.

Turns out humans could hijack any account on the platform. No passwords. No authentication. Over a million credentials were sitting in an open database.

Moltbook creator, Schlicht used "vibe coding" to build the entire site without writing a single line of code himself. The problem is, he and AI forgot some basic back-end security code. Two SQL commands would've prevented the whole mess.

Why insurance pros should care: AI agents are already processing insurance claims and carrier communications in the real world. One user reported their bot "accidentally started a fight with Lemonade Insurance because of a wrong interpretation" and somehow got the claim reinvestigated. The technology clearly isn't foolproof and the platform where these agents "learn from each other" just exposed that.

✔️ The Feds Are Coming For The Swoosh

The EEOC just asked a court to force Nike to hand over docs in a discrimination investigation. The unexpected twist is: they're investigating alleged bias against White employees.

The drama started when EEOC Chair Andrea Lucas noticed Nike's public goal to fill 30% of director-level roles with racial minorities by end of 2025. Lucas, a trump appointee, thinks that might be illegal discrimination.

We mentioned this in last week’s newsletter: This is a new EEOC with new ideas about what is fair and legal. Those DEI programs that were trendy 3 years ago? Yeah, those might get you sued now.

Benefits Bros, keep your head on a swivel. This isn't about being for or against DEI. It's about recognizing the convo has completely flipped, and communicating that to your clients.

😶‍🌫️ Trump Gives Cannabis a Promotion

President Trump signed an executive order in December directing federal agencies to move marijuana from Schedule I to Schedule III—the biggest federal cannabis policy shift in decades.

What changed: Cannabis moves from "no medical use" (like heroin) to "moderate abuse potential" (like Tylenol with codeine). The reclassification focuses on medical research and CBD access, NOT recreational legalization.

What it means for your clients: Cannabis businesses can finally deduct normal operating expenses under Section 280E, improving cash flow and margins. But here's the catch—banking restrictions remain until Congress passes the SAFE Banking Act.

Insurance impact: Don't expect a rush of carriers or cheap capacity. AM Best says access improves incrementally, with insurers favoring professionalized operators over mom-and-pop shops. Premium spreads will widen between well-managed and poorly-managed cannabis clients.

💌 Zurich’s Full Court Press on Beazley Finally Pays Off

Like the guy who keeps asking the girl out until she finally says yes, Zurich appears to have finally sealed the deal with Beazley. After multiple rejected attempts to court specialty insurer Beazley, the Swiss carrier’s latest €8 billion offer — a nearly 60% premium — finally got board approval after striking out repeatedly since June 2025.

Why Zurich wouldn’t take no for an answer: The deal accelerates Zurich’s specialty insurance ambitions, adding scale in fast-growing areas like cyber . It also buys them instant credibility at Lloyd’s without years of grinding to build from scratch.

The union sends a clear message to the market: Specialty and cyber aren’t optional anymore. Build it, buy it, or watch from the sidelines.

Zurich has until February 16 to put a ring on it and make it official.​​​​​​​​​​​​​​​​

NUMBER OF THE WEEK

🫠 $5,000,000

That's what Acrisure is facing in a lawsuit after one of their brokers allegedly sold coverage she didn't understand.

Long story short: a restoration contractor filed a claim, GuideOne denied it. The contractor is arguing the broker—who positioned herself as a restoration insurance specialist—never clarified policy language with the carrier before binding coverage.

We’ll see how it plays out in court.

Just a friendly reminder to dot your I's and cross your T's out there. Carriers want to deny everything, and plaintiff attorneys are barbarians at the gate.

P&C POD OF THE WEEK

In this episode we talk with Trey Griffy, an HOA insurance specialist. He reveals the behind-the-scenes strategies that took him from struggling producer (he tried to quit 3 times) to building a $1M+ book in a unique niche. Whether you're a new producer in need of motivation, or a seasoned producer looking to sharpen your saw, this episode is for you.

BENEFITS POD OF THE WEEK

In this episode, Luke Berry discusses all things "vendor stack". Why every Benefits broker needs one, how to build one, and how to deploy it without overwhelming clients. Luke also touches on recent regulatory changes affecting PBMs and the implications for employers.

TOOLS OF THE WEEK

📈 Insurance Xdate: free trial here

📬 Max Revenue Letter: sign up here⁠⁠⁠⁠⁠⁠⁠

📒 Producer Playbook: learn more here

⁠⁠⁠⁠🕹️ Play Producer Games: check it out here

POLL OF THE WEEK

OPINION

Send Us Your Feedback

• What did we get right?

• What did we get wrong?

• What segments would you add?

We welcome any and all feedback.

Just hit “REPLY” and let er’ rip.

SHARE

That’s this week in insurance.

Forward it to your coworker most likely to microwave tuna in the breakroom.

See you next week.