The NAIC held its 2026 Spring National Meeting on March 22–25. Below is a summary of the guaranty association–related activity at the meeting.

Opening Session

Commissioner Lara (CA) welcomed attendees to San Diego (his final California NAIC during his term as insurance commissioner), dedicating his speech to California firefighters for their tremendous work during his term. Lara highlighted the resilience of the California market and underscored California’s work on catastrophe modeling and climate and resiliency. San Diego Mayor Todd Gloria commended Commissioner Lara for his work throughout his career and extended an invitation to all states to collaborate with the city of San Diego as a border, military, and catastrophe-prepared city.

NAIC President Scott White (VA) named the NAIC’s top three priorities as the homeowners’ data call (which will culminate in a report targeted for early June), AI (with hopes to adopt the AI Systems Evaluation Tool by the Fall National Meeting), and updates to the insurer investment framework.

Financial Condition (E) Committee

Received Report on AI Systems Evaluation Tool Pilot: For the 7th meeting in San Diego, regulators heard an update on the AI Systems Evaluation Tool pilot program. Commissioner Kaj Samsom (VT) pointed stakeholders to the documents tab of the Big Data and AI Working Group webpage if they want to learn more about the Evaluation Tool and the pilot program (confessing that he needed a quick refresher prior to giving his report). States participating in the pilot have sent inquiries to certain domestics, and regulators from those states are holding weekly calls to coordinate and learn more about the tool. The group is striving to create a feedback loop and will develop a mechanism to receive feedback from participating companies later this year.

Preview of CRP Due Diligence Framework: In her report on the new Invested Assets Task Force, Carrie Mears (IA) highlighted that the Credit Rating Provider (CRP) Working Group plans to meet in late April to discuss (and likely expose) the draft due diligence framework for CRPs.

No Further Action on Co–YRT Arrangements: Kevin Clark (IA) reported on SAPWG’s activities to implement the 2025 changes to reinsurance arrangements that involve a coinsurance and YRT component. Recall that the changes became effective immediately for new or newly amended contracts; for existing contracts, companies were encouraged to work with their regulators to address the changes, likely through a permitted practice. SAPWG sent a survey to states that included a sample permitted practice and asked whether states—namely those that do not allow permitted practices—needed more flexibility to address existing arrangements. None of the 47 respondents said they needed any further flexibility.

Technical Changes to go Through E Committee Technical Change Process: As always, any changes coming through the committee’s working groups and task forces that are deemed technical in nature will go to the members shortly after the national meeting. If no commissioners object to a particular item within 10 days of receipt, the item becomes effective immediately. The changes will eventually be uploaded to the E Committee’s webpage under “Documents.”

Life Actuarial (A) Task Force

Adopted APF 2025-16 (Alignment of Reinvestment Guardrail): The task force adopted APF 2025-16, which establishes consistent reinvestment guardrails across VM-20, VM-21, and VM-22 with the following credit quality blend: 5% Treasury, 15% PBR credit rating 3 (Aa2/AA), 40% PBR credit rating 6 (A2/A), and 40% PBR credit rating 9 (Baa2/BBB). The ACLI and the American Academy of Actuaries both performed testing to show the impact of the revised guardrails across various lines of business. The ACLI’s impact testing, which included 13 companies, showed an average reserve decrease of 1.3% for VM-20 business (2.5% without Net Premium Reserve and excluding one outlier company) and an average decrease in stochastic reserve of 0.1% for VM-21 business. Similarly, the NAIC’s Model Office Testing generally showed modest impacts across product lines, with the largest impact to VM-20 business. The working group adopted the proposal, with Bill Carmello (NY) as the one “No” vote. Carmello raised concerns with the inclusion of BBB-rated assets into the guardrail.

Exposed PRT Reinvestment Guardrail & Academy Principles for Inclusion of Illiquidity Premium until May 7: Seong-min Eom (NJ) introduced APF 2026-01, which incorporates the pension risk transfer (PRT) guardrail concept that was introduced at the 2025 Fall National Meeting. The formal APF now proposes specific Valuation Manual language that would allow companies to use a different reinvestment guardrail/asset mix (100% BBB), including a 50-basis-point increase to account for illiquidity premium. Appointed Actuaries would need to justify the illiquidity premium assumption on a moderately adverse basis.

• Academy Principles: Andrew Jenkins presented 7 principles developed by the Academy’s Annuity Reserves and Capital Subcommittee (ARCS) for evaluating the appropriateness of an illiquidity premium in PBR calculations (beyond PRT business). The principles emphasize that an illiquidity premium should be recognized only when both the liability is fixed or has limited variability under moderately adverse scenarios and the supporting assets are demonstrably less liquid than public non-callable corporate bonds. The principles also require granular evaluation by asset class, modeling of complex risk factors, use of sufficient historical data spanning multiple economic cycles, and calculation on a net spread basis accounting for defaults and expenses. The ARCS noted these principles should not necessarily be limited only to a certain product type or category but instead should be applied based on the underlying asset portfolio and liability characteristics.
• Regulator Feedback: Regulators continue to grapple with whether this proposal should apply to other types of business with characteristics similar to PRT business. Ben Slutsker (MN) noted that it would be difficult for regulators to refute companies’ request for inclusion of an illiquidity premium. Dave Wolf (NJ) noted that PRT business is highly unlikely to experience a “run on the bank” scenario and reminded the task force that this proposal is designed to remove incentives for companies to cede business offshore. Kevin Clark (IA) questioned the need to revise the asset mix in the guardrail. Carmello reiterated his concern about using a BBB asset mix in the guardrail.

The APF and the Academy’s principles, along with a question regarding whether the principles should be incorporated into a drafting note, were exposed for 45 days.

Exposed ACLI Proposal on Retroactive Application of VM-22 until June 22: The task force heard comments on its proposed mandatory and optional approaches for applying VM-22 to in-force business. The bulk of the discussion centered on the ACLI’s proposed framework to implement the subgroup’s Option E (optional application by product). Under the ACLI’s proposal, a company could elect to apply VM-22 at the policy form level after notice to and non-disapproval by the domestic regulator; once this happens, the election could not be reversed. The proposal outlines how regulators could evaluate the appropriateness of the election, which varies based on whether the company chooses to apply VM-22 to all business, no business, or some business. The framework also suggests a timeline for notification, documentation, and review, but no specifics were included. The discussion led to questions regarding the specific evaluation criteria (and whether there are ways to involve VAWG), implementation frequency, documentation requirements, and tax considerations, among other things. The ACLI’s proposal and outstanding questions were exposed by the VM-22 Subgroup for 90 days.

Discussed Next Steps for “Day 2” VM-22 Issues: The task force discussed comments received and next steps on the following Chair exposures from the Fall National Meeting:

• Removal of criteria requirements for aggregation of payout annuity and accumulation reserving categories, and addition of VM-31 disclosure requirement (APF 2025-20): No changes are expected at this time—the subgroup will schedule a call within the next month to consider the APF for adoption as currently drafted. The ACLI expressed support for the general direction of the proposal but advocated for greater flexibility regarding companies’ approaches to aggregation. The Academy raised concerns with aggregation before the calculation of a scenario reserve because VM-22 lacks guidance regarding model segments for purposes of aggregation. The Academy proposed incorporating language similar to what is in VM-20 (allowing the products to be combined into a single model segment only if the risks are managed together). However, Rachel Hemphill (Chair, TX) suggested there would be no practical benefit to its inclusion since companies have broadly interpreted the VM-20 language.
• Optionality regarding valuation treatment of settlement options in contracts written prior to VM-22 (APF 2025-19): A revised APF was exposed until May 7. With respect to the list of contracts that could be subject to pre-PBR CARVM, the revisions will (1) remove the “on or after Jan. 1, 2017” contract date language; (2) reflect the need for domestic regulator non-disapproval instead of approval; (3) include settlement options with host contracts not subject to PBR; and (4) permit more granular optionality.
• Deposit-Type Contracts within the scope of VM-22 (APF 2025-18): The VM-22 Subgroup will schedule a future call to consider adoption of the APF. The ACLI was the only commenter and offered support for the proposal.
• Whether to scope in Funding Agreements, GICs, and Stable Value Contracts: No decisions were made on whether these contracts should be included in VM-22; there was a broad range of interested party and regulator views on the topic. To better inform the direction of the subgroup, a series of questions was exposed until June 8 to gather more information about (1) the characteristics that would qualify a contract for exemption; (2) how risks are addressed if a contract is excluded and what those risks are; and (3) the cost-benefit analysis for company implementation if the contracts are scoped into VM-22.

Re-exposed APF 2024-12 (Group Annuity Data Collection) until April 6: NAIC staff walked through the latest iteration of APF 2024-12, which establishes a reporting framework for group annuities. This exposure incorporates several changes since the last exposure, including clarifying language on the treatment of non-U.S. business, a new paragraph recognizing that companies may not have all necessary information to provide complete reporting, and clarifying language regarding the scope of the data collection (the intent is to align the scope of business collected with the scope of VM-22). The proposed effective date for the collection remains January 1, 2027.

Formed a Non-Forfeiture Drafting Group: The task force voted to form a drafting group to consider clarifications to nonforfeiture requirements, including the calculation and amortization of the initial expense allowance for variable universal life (VUL) and indexed universal life (IUL). The Academy and the ACLI both voiced support for the establishment of the drafting group. Tomasz Serbinowski (UT) and David Hippen (WA) each submitted comment letters highlighting specific ambiguities in Model 585 (Universal Life Insurance Model Regulation), Model 270 (Variable Life Insurance Model Regulation), and AG 24 regarding the interest rate to be used in computing the initial expense allowance and its amortization. Hemphill confirmed that the drafting group’s initial scope will focus on the specific clarifications outlined in the exposure questions and that any changes would apply prospectively. California and Connecticut volunteered to participate in the drafting group.

Update on AI Systems Evaluation Tool Pilot: Miguel Romero (NAIC) provided the first of seven National Meeting updates on the Big Data and AI Working Group’s AI Systems Evaluation Tool and pilot program:

• The 12 participating states are holding weekly calls to coordinate company selection, discuss anticipated company responses, and receive training on the tool and related data science.
• Domestic regulators are determining which companies are in scope.
• The current mix of company participation contains more property and casualty and life insurers than health.
• Participating states have requested information from anywhere between 1 to 10 companies, with two states reaching out to more than 10 companies.
• The tool is being used in a mix of regulatory processes—market conduct and financial exams, financial analysis, and general inquiries.
• The NAIC will create a coordination mechanism to solicit feedback on the tool from participating companies.

Rachel Hemphill (Chair, TX) suggested a regulator-only LATF session down the line for NAIC staff to walk through a life insurance company example so members can better understand how the tool works and provide feedback if necessary.

Received GOES Subgroup Report: NAIC staff provided a quick update on the status of the new Generator of Economic Scenarios (GOES). Notably, the Life RBC Working Group indicated it would consider changes to incorporate GOES into various aspects of the RBC framework the following day. Additionally, the NAIC is working on document enhancements, with new documentation expected in early April (including a Basic Data Set Validation Report, a revised Q&A, and GOES Parameters). As required by its governance framework, the NAIC reported two incidents related to the new GOES, along with the resolution of each item.

SOA Previews Revised VBT; Decision Points Exposed until April 13: The Society of Actuaries (SOA) gave a detailed presentation on some of the shortcomings of the current Valuation Basic Table (VBT). The recent work performed by the SOA suggests there is a need for changes in the VBT at the younger and older ages and for female risks. LATF exposed the following key decision points on which the SOA is seeking input: (1) which exposure years to include and whether to have separate tables: (2) by product (namely term and non-term); (3) by face amount; (4) by risk class structure; and (5) for juvenile risks. The SOA has established a detailed (and aggressive) timeline to complete its final recommendation by March 2027. The decision points were exposed for a 21-day comment period.

Exposed APF 2026-02 (IMR Reference Consistency) until April 22: This APF updates the references to IMR treatment in VM-22. The changes pull language from VM-20 to remove ambiguity in the IMR references.

Exposed APF 2026-03 (VM-22 SPA Dynamic Lapse Formula) until April 13: Elaine Lam (CA) and Ben Slutsker (MN) proposed clarifying updates to the calculation of the dynamic lapse formula in the VM-22 SPA to facilitate a change from whole numbers to decimals. The APF proposes (1) multiplying the decimal percentage inputs of the Market Factor by 100; and (2) dividing the Rate Factor by 100 to turn it into a decimal percentage output. The APF was exposed for 21 days.

Re-exposed APF 2023-10 (VM-20 Stochastic Reserve Discount Rates) until April 13: The Academy and the ACLI worked together on revisions to the APF, which now incorporates into VM-20 the exact language from VM-21 and VM-22 on how to calculate the Net Asset Earned Rate on the additional invested asset portfolio. Additionally, it adds the Direct Iteration Method as an approach—also consistent with VM-21 and VM-22. Because the revisions are based on existing language, the task force opted for a shorter exposure period of 21 days.

Discussed Errata Process for Nonsubstantive VM Corrections: The task force discussed with the A Committee a proposed process whereby the task force could make nonsubstantive edits to the Valuation Manual (such as correcting typos) to improve its usefulness but also respect the process for VM changes. The task force plans to create a rolling list of editorial updates to the VM in an errata APF, which would then be exposed and adopted (like any other APF) closer to June. Oregon suggested also having an accompanying redlined version of the VM to easily show the changes, which NAIC staff will take under consideration.

Update from Society of Actuaries (SOA): Dale Hall provided an update on the SOA’s recent Research and Education activities. Hall highlighted an upcoming data call that will inform a study on life insurance company expenses. The study will go deeper than existing work in this space and cover individual life and annuity products. It is anticipated that the data call will go out to companies in mid-April, with information due back by July 31. The SOA hopes to make this an annual study. Additionally, the SOA has recently released two reports: one on complex assets and another on the international reinsurance landscape. The complex assets report highlights the main drivers for growth in these assets and associated risks (namely liquidity and valuation risk). Both reports are available here. The SOA released its 19th annual emerging risk survey earlier this month, highlighting financial volatility and technology risks as areas of potential risk. Finally, the SOA’s third annual AI Insights Symposium is scheduled for May 13–14 and will include speakers from the Department of Commerce and NIST.

Adopted APF 2025-17 (VM-20 Requirements for Aggregation in the Stochastic Reserve): The task force adopted APF 2025-17 proposed by Texas, which allows for aggregation in the VM-20 stochastic reserve. The proposal improves alignment across VM-20 and VM-22. The ACLI voiced its support for the proposal (and the continued commitment from regulators to align VM-20, VM-21, and VM-22, where appropriate).

Update from Academy’s Actuarial Standards Board: Laura Hanson highlighted actuarial standards of practice (ASOPs) that currently are under revision, including ASOP 1, Introductory Standard of Practice, ASOP 12, Risk Classification (for All Practice Areas); ASOP 41, Actuarial Communications; ASOP 52, Principle-Based Reserves for Life Products under the NAIC Valuation Manual; and a new ASOP on Pricing Reinsurance or Similar Risk Transfer Transactions Involving Life Insurance, Annuities, or Long-Duration Health Benefit Plans. Notably, the Academy received 57 comment letters on the first ASOP 12 exposure and hopes to have a revised exposure later this year.

Update from Academy’s Committee on Qualifications: The committee continues to look at ways to simplify U.S. qualification standards and related FAQs, with a goal of reducing the number of questions regarding qualification requirements. Regulators raised questions about the current standards at the Fall National Meeting.

Update from Academy’s Life Practice Council (LPC): The LPC reported on recent engagement across various NAIC groups, including Life RBC, RBC IRE, and the Longevity Risk Subgroup. The Academy touted its Life Investment Summit in May at several points during its reports. The LPC has recently released reports on fixed indexed annuities (product mechanics and risk management) and calculation of Internal Revenue Code Section 7702 Minimum Interest Rates. Finally, the Academy continues to seek input from industry on potentially disruptive events that may cause current actuarial models to no longer be effective.

NAIC/Consumer Liaison Committee

Update on 2025 Consumer Rep Referrals: NAIC President Scott White (VA) recapped the NAIC/Consumer Participation on Board of Trustees Meeting. The NAIC will collaborate with Center for Insurance Policy and Research (CIPR) to formulate and implement a mechanism to solicit feedback from consumer representatives and NAIC members to enhance the consumer representative program. The Board also reviewed three 2025 recommendations, which included two to the Health Insurance and Managed Care (B) Committee and one to the Property and Casualty Insurance (C) Committee. Commissioner White reported that the recommendations to the B Committee have been incorporated into their 2026 charges. To address the recommendation to the C Committee, the NAIC will research which states have laws or regulations that require insurers to proactively (or upon request) provide policy language to consumers.

The NAIC/Consumer Liaison Committee also heard presentations on the following:

2026 Consumer Representative Health Priorities: A group of health-focused consumer representatives presented on a range of priorities they’d like the NAIC to focus on this year, which were provided to the Health Insurance and Managed Care (B) Committee. Among the items discussed were affordability and access, ensuring coverage meets consumer needs, and senior issues and long-term care (LTC) insurance. The representatives also continue to encourage the NAIC to advocate for Congress to reinstate the enhanced advanced premium tax credits. A few things to note:

• To make health care more affordable for consumers, the presenters emphasized the need to focus on the underlying cost drivers. Consumer representatives specifically recommended the NAIC and states establish hospital price caps, limit hospital facility fees, rein in prescription drug prices, and stop provider consolidation. Lucy Culp (Blood Cancer United) acknowledged that some of these overlap with the goals of the Health Care Affordability and Mitigation (B) Working Group.
• Consumer representatives continue to advocate for the NAIC to create a prior authorization working group. They also suggested the D Committee develop standards related to prior authorization similar to the approach underway for pharmacy benefit managers (PBMs), and for the H Committee work on best practices related to AI and prior authorization.
• Bonnie Burns (CHA) recommended the creation of several new working groups under the Senior Issues Task Force to focus on Medicare Advantage and Part D issues, Medigap, and LTC. Regarding LTC, she called for more regulatory attention on hybrid products in the life and annuity space and highlighted a recent consumer representative report on LTC insurance market challenges. Grace Arnold (MN) agreed and said she would like to restructure the B Committee this year to take on some of these items.
• Deborah Steinberg (LAC) discussed challenges related to mental health parity and addiction equity, noting consistent barriers to mental health and addiction care. She encouraged the NAIC to identify best practices for MHPAEA compliance and enforcement, strengthen data collection to improve enforcement of mental health and SUD anti-discrimination protections (and examine those protections in other types of insurance), and limit the expansion and mitigate the harms of non-ACA plans.
• Regarding non-ACA compliant plans, Janay Johnson (American Heart Association) raised concerns with what she described as aggressive and deceptive marketing practices as well as the legal issues and consumer impact of Section 1333 state compacts.
• The consumer representatives also noted several ways the NAIC and states can better inform and engage consumers, including the development of fact sheets and FAQ documents (giving a nod to the Consumer Information Working Group), launching public awareness campaigns, and partnering with community and advocacy groups.

Whether Death Records Are Not Locating All Beneficiaries of Unclaimed Benefits: Dick Weber (Life Insurance Consumer Advocacy Center) reported on inefficiencies of the death master files and called on the NAIC to develop a model regulation to require insurers to search the death master file as well as the vital records data sold in some states, among other things. He touted NCOIL’s Model Unclaimed Life Insurance Benefits Act, which is adopted in 25 states, but asserted that model does not go far enough.

Health Actuarial (B) Task Force

2026 Task Force Activities: Kevin Dyke (Chair, MI) reviewed the task force’s plans for 2026: (1) finalize a health knowledge statement that will be adopted in the definition of a qualified actuary in the health annual statement instructions, as put forth by the Society of Actuaries (SOA); (2) through the Long-term Care Actuarial Working Group, adopt 2023 SOA lapse and mortality tables and incorporate them into VM-25 (reserving requirements); (3) evaluate VM-25 for any changes needed to incorporate a principle-based reserving framework; and (4) monitor the LTC MSA framework along with the new cost-sharing provisions.

CMS Update on NBPP Proposals: CMS-CCIIO representatives Jeff Wu, Brent Plemons, and Krutika Amin provided clarifications about the proposals in the CY27 Notice of Benefit and Payment Parameters (NBPP) and updated Actuarial Value (AV) Calculator. Task force members sought clarifications on the meaning of certain new reporting requirements that CMS proposes to build into the rate review template to better plan for any contingency scenario in which cost-sharing reduction payments are funded, noting the administration is also interested in whether the CSR loads are consistent with the CSR payments issuers ultimately incur in the year. Washington State pressed CMS to consider edge cases as it finalizes the AV calculator and potentially allows catastrophic and bronze-level plans to have a MOOP in excess of the otherwise applicable ACA limits to meet a 60% AV level. As expected, CMS did not say when the final NBPP will be issued but hinted that some proposals might need to be “medium term” (alluding to the multi-year catastrophic plans proposal) given the short amount of time allotted to finalize the rule in time for this year’s plan filing season. Finally, CMS said the highly anticipated effectuated enrollment report for this year’s open enrollment period (given the cessation of enhanced premium tax credits) is “imminent,” hinting that it would come out before the NBPP is finalized. The report is usually out by mid-March and came out March 27.

SOA Update: Dale Hall of the Society of Actuaries (SOA) presented their work developing several important experience reports. With 84% of the LTC industry reporting through 21 companies, the LTC experience report is expected to be finalized by spring 2027, but preliminary results may be reported to HATF in the interim. The SOA is also finalizing an experience report on LTC disability, though early returns show there are some differences in experience from a reference 2012 table. On March 10, the SOA finalized its 19th annual emerging risk survey that notably included 100 responses from C-suite level risk officers or chief actuaries. Finally, the SOA noted its already-published descriptive report on the use of reinsurance and captives in the health insurance market.

Academy Update: Tricia Matson, President of the American Academy of Actuaries, began the Academy’s set of updates with a reminder of the robust responsibilities and discipline process if there is poor actuarial work. William Hines of the Academy later reported that the Actuarial Board of Counseling and Discipline worked on 24 cases in 2025 alleging a violation of the code of conduct, and a “reasonable number” came from actuaries practicing in regulatory settings. The Academy also reported that its committee on qualifications (of which Kevin Dyke (Chair, MI) is a member) is considering whether and how to update the qualification standards, acknowledging that the volume of FAQs it issues raises the question of whether language in the existing standards should be clarified. The Actuarial Standards Board (ASB) briefly discussed the updates to 3 general actuarial standards of practice (ASOPs) (ASOP Nos. 1, 12, and 41) and 4 health-specific ASOPs, including a new ASOP on long-duration plans (Pricing Reinsurance or Similar Risk Transfer Transactions Involving Life Insurance, Annuities, or Long-Duration Health Benefit Plans), which will be exposed after a June meeting. The ASB recently approved ASOP No. 7, Life or Health Cash Flow Analysis, effective June 1.

Health Practice Council Update: Katie Dzurec and Annette James from the Academy’s Health Practice Council reviewed its comments in response to the proposed CY2027 NBPP and longer-term recommendations for states on affordability levers, noting that some states are considering ways to incentivize enrollment in plans outside of the ACA risk pool. The Council instead highlighted policies to shore up the ACA risk pools: wraparound state subsidies; public options like the Basic Health Program, reinsurance, and merging of individual and small group markets (potentially with incentivizing ICHRAs). The Council gave a deeper dive on its recent comments to the NBPP proposed rule, noting concerns about the impact to issuer solvency on the proposal to require states to defray the costs of mandated benefits in excess of EHBs. The Practice Council also provided a glimpse of the alternative framework to measuring “ROI” of a benefit, which was developed by its equity committee. The framework (which was to be presented in an April 16 webinar) is designed to highlight indirect costs, indirect savings, and nonfinancial outcomes that may impact the value of a program. Finally, the Council shared it is talking about rate review and solvency red flags, MedSupp closing of blocks, and LTC combination products and reserving for LTC in 2026, among other topics.

AI Systems Evaluation Tool Pilot: After the NAIC’s Dorothy Andrews gave a brief overview of the AI systems evaluation tool state pilot, Dyke commented about the importance of the initiative given its potential interplay with actuarial practice on rates and solvency. He asserted it is important for the actuarial task forces to stay engaged and looks forward to where actuarial expertise can help as the pilot proceeds.

Life Risk-Based Capital (E) Working Group

Re-exposed Proposal 2025-16-L on collateral loans, which proposes a change from a single, uniform RBC factor for all Schedule BA collateral loans to a look-through framework tied to the characteristics of the underlying collateral. The initial proposal suggested a single overcollateralization haircut to the RBC factors for those collateral loans backed by residual tranches/interests and those backed by investments in JVs/LPs/LLCs. The ACLI proposed a detailed framework for overcollateralization adjustments—structured as a sliding scale in which higher collateralization ratios receive larger haircuts to the base look-through RBC factor. The ACLI also recommended retaining the existing 6.8% factor for all other collateral loans. The American Investment Council and Alternative Credit Council also submitted comment letters voicing support of the general look-through direction of the proposal.

Following lively debate (and a roll call vote), the working group agreed to a 2027 effective date for any changes made to the treatment of collateral loans. Regulators raised questions related to the auditability of valuations on the underlying collateral and suggested tweaks to the ACLI’s proposed tiering structure. A revised proposal was exposed with two cover questions regarding these two points until April 13.

Re-exposed Proposal 2025-14-L, which implements technical changes to C-3 Phase I and C-3 Phase II to reflect the adoption of the new generator of economic scenarios (GOES). The ACLI proposed two modifications to the proposal while the working group continues to consider the inclusion of the Net Asset Earned Rate (NAER). The primary ACLI recommendation is to use a 10-year Treasury instead of the current 1-year Treasury for discounting. Regulators generally approved of this change, provided the working group continues to make progress on the NAER discussion. Whatever changes are made to the discount rate as a result of this proposal likely would be an interim solution. This item was exposed for 23 days. Regulators requested information about how these changes would compare to use of the NAER methodology; Brian Bayerle (ACLI) suggested that performing that comparison may be difficult, but the ACLI will do its best to prepare some type of analysis during the exposure period. Comments were due April 13.

Received report from the Academy on RBC ratios and impairment risk: The American Academy of Actuaries presented research on the relationship between RBC ratios and insurance company impairment risk, conducted using AM Best impairment data matched against NAIC RBC ratio data covering 2011–2023. The analysis covered approximately 1,800 life companies, 88 of which experienced impairments during the period.

The Academy found that, across all insurers, RBC ratios on their own show little meaningful statistical relationship with impairment experience. However, after filtering out very small companies and companies with extremely high capital ratios, a clearer and more stable predictive pattern emerged. For life insurers in the filtered sample, companies with RBC ratios below approximately 700% showed materially elevated near-term impairment probabilities, while the probability of impairment approaches zero for companies with ratios above 1,100%.

Adopted proposal 2025-17-L on scope clarification, which clarifies that that for LR027 in the life blanks, companies that reserve for payout annuities resulting from variable annuities under VM-21 (which requires domiciliary commissioner approval) should exclude such reserves from the Interest Rate Risk and Market Risk calculation.

Health Risk-Based Capital (E) Working Group

Made a referral to the Capital Adequacy Task Force regarding Proposal 2025-15-CA, which updates the structure of several pages of the RBC formula based on the recommendations from the Academy’s H-2 Underwriting Risk Report. The report presented a revised structure to more closely align the underwriting risk pages with the lines of business as presented in the Analysis of Operations page. In addition to the health formula, these changes are also being proposed to the life and P&C formulas to mirror the line of business changes. Finally, this item implements a new alternative risk charge based on the American Academy of Actuaries’ recommendation. The Academy noted that the proposal accurately implements its recommendations.

Discussed and Exposed 3-year Phase-in of H-2 Underwriting Risk Factor until April 22: NAIC staff conducted an analysis of the impact of a 3-year phase-in of the Academy’s revised H-2 underwriting risk factor using 2024 and 2025 Health filings. The analysis was conducted using both the Initial Factor and Excess Factor and the new Premium Tiers. In the initial analysis, the total number of companies that experienced adverse change to their RBC Action Level was 153 when utilizing the full factor change and full premium tier change from the Academy report. When using a third of the factor and tier increase for 2024 filings, 57 companies would experience adverse change to their RBC Action Level. The working group will continue discussions about the inclusion of a diversification credit, which regulators hope to finalize during the phase-in period. AHIP and BCBSA both emphasized that a number of decision points remain open, including the appropriate risk level and time-horizon. Steve Drutz (Chair, WA) has emphasized several times that he wants to give companies appropriate lead time to prepare for the changes to the underwriting risk factor. The phase in document was exposed for a 30-day comment period ending April 22.

Exposed Proposal 2026-03-CA until April 22, which contains the annual update of the underwriting factors for Comprehensive Medical, Medicare Supplement, and Dental & Vision for the investment income adjustment.

Received Academy Report on RBC and Impairment Risk: The Academy continues its efforts to update each of the RBC working groups on its analysis of how well RBC ratios relate to impairment risk. As was shown with life companies, RBC ratios on their own show little meaningful relationship with impairment experience. However, once smaller insurers and companies with extremely high RBC ratios are removed, a clearer and more stable predictive pattern emerges. With RBC ratios of 1,000% or more, all forecast probabilities of impairment approach 0%. The Academy plans to continue its work by looking at how additional factors interact with RBC ratios and by expanding the timeline of company information in the analysis.

Upcoming Work: At the end of the meeting, Drutz reminded participants of upcoming work on long-term care and stop-loss factors.

Risk-Based Capital Investment Risk and Evaluation (E) Working Group

Steve Smith (American Academy of Actuaries) continued to walk the RBC Investment Risk and Evaluation Working Group through details surrounding the Academy’s CLO efforts. The Academy is seeking to identify certain CLO attributes to analyze default risk (and thus assign an appropriate risk charge), as opposed to performing modeling on individual CLOs to determine the appropriate charge. Recall that the Academy’s initial presentation proposed using rating agency ratings and tranche thickness to determine the appropriate risk charge; that presentation was out for comment through April 16. Smith’s presentation focused on questions that arose during the initial conversation and additional details on how the Academy made some of the decisions in its analysis. He provided a detailed explanation of the regression analysis that ultimately led to the Academy’s proposed factors (see Slide 4 on page 9 of the meeting materials). He also outlined how the Academy landed on the 4% tranche thickness cutoff and the impact of changing the 4% to 4.25%. Other takeaways from the conversation include:

• Uncertainty remains regarding the treatment of Middle Market CLOs: The Academy’s proposal relies fully on information from Broadly Syndicated Loan (BSL) CLOs, which contain rating information on underlying loans. Regulators questioned Smith on whether the same framework could be used for Middle Market (MM) CLOs that do not have the benefit of ratings for the underlying loans. Smith recognized that rating agencies perform a credit assessment of the underlying loans of MM CLOs, and the Academy would need to obtain that information to perform the same type of analysis. The working group would need to get comfortable with this analysis as well. Phil Barlow (Chair, DC) noted that MM CLOs make up roughly 20% of insurers’ CLO holdings. Kevin Clark (IA) emphasized that it seems like rating agency ratings appropriately analyze the risk of loss for BSL CLOs; as such, there would need to be a reason to take a different approach for MM CLOs. Smith echoed that sentiment, noting that the Academy’s work to date “mostly validated rating agencies’ ability to evaluate tail risk” for BSL CLOs.
• Information on residuals and portfolio adjustment factors still to come: Barlow and Smith previewed a call in April to discuss the Academy’s proposals related to CLO residuals and a portfolio adjustment factor.
• Tranche thickness matters only at Baa3 and below tranches: As highlighted in its initial proposal, tranche thickness appears to matter more for lower-rated tranches. As such, the Academy is proposing one risk charge for tranches rated above Baa3, regardless of tranche thickness. The risk charges for tranches rated Baa3 and lower would depend on tranche thickness (with higher charges for thin tranches).

The working group exposed a revised structural change for a 25-day comment period ending April 17. The revised structure would capture tranche thickness for tranches rated Baa3 or lower to align with the Academy’s initial proposal.

Risk-Based Capital Model Governance (EX) Task Force

The RBC Model Governance Task Force spent most of its meeting discussing two main agenda items: (1) comments received on its RBC gap analysis request for comment; and (2) the overarching question of whether more commissioner involvement is needed on policy questions that drive technical analysis of RBC changes. Here are the key takeaways from these discussions:

Summary of comment letters on RBC gap analysis request for input: Commissioner Godfread (Chair, ND) emphasized that the goal of the request for input was for stakeholders to identify possible gaps or areas of concern that warrant further consideration. The task force is going to further analyze the comment letters to see if any issues require additional analysis. Amnon Levy (Bridgeway Analytics) summarized comments received, which can be grouped into themes of (1) governance, model monitoring, development, and update processes; (2) differences across formulas; (3) gap and inconsistency process; and (4) linkages to the broader framework (see pages 12–15 of the Meeting Materials). Several commenters supported establishing a clear and durable framework for how RBC changes are evaluated and prioritized, calling for greater transparency, stronger documentation, and a more disciplined process. While a number of commenters highlighted the importance of commissioner involvement in policy decisions, NAMIC argued that any RBC adjustments should continue to be managed bottom-up, with the technical working groups addressing emerging risks and overall effectiveness of each formula.

Discussion of greater commissioner involvement on policy decisions: Godfread called the question of whether commissioners would find value in injecting a layer of policy analysis into discussions prior to advancing technical changes to the RBC framework. Essentially, the question is whether commissioners should weigh in on why a change is being made before the technical groups determine how the change is made. The typical process currently plays out with the technical groups making a change, followed by a policy discussion on the back end. Commissioner Ommen (IA) and Director French (OH) emphasized that the policy decisions often are colored by input from their technical teams and suggested that any change should involve a level of integration between commissioners and technical experts. Kevin Clark (IA) suggested that most states likely are doing some form of this integration already but noted that regulators likely would benefit from a refinement and greater formalization of the process to ensure better consistency. Ommen also emphasized that any changes made in this area should not slow down the overall process of adopting and implementing RBC changes. Godfread said that his and Matt Fischer’s inboxes are open to receive feedback on this important question.

Statutory Accounting Principles (E) Working Group

Adopted the following items:

• 22025-25: Separate Account Nonadmitted Assets, which revises SSAP No. 56 – Separate Accounts to incorporate the concept of non-admitted assets within the separate account balance sheet and corresponding schedules. Revisions will become effective for year-end 2027 reporting. See corresponding Blanks Item 2025-23BWG.
• 2025-30: Administrative Services Contracts Disclosure Clarification, which changes the Administrative Services Contracts (ASC) disclosure in SSAP No. 47 – Uninsured Plans and Note 18B. The main reason for this clarification is to have a result that details the net gain or loss on the ASC plans. See corresponding Blanks Item 2025-24BWG.
• 2025-31: Updated Coverage Gap, which revises INT 05-05: Accounting for Revenues Under Medicare Part D Coverage to replace references to the CMS Coverage Gap Discount Program with the CMS Manufacturer Discount Program. The Coverage Gap Discount Program ended as of December 31, 2024, and has been replaced by the Manufacturer Discount Program.
• 2025-32: Remove Shaded Text, which removes previously superseded guidance from various portions of the AP&P Manual.
• 2025-33: Updates to Annual Statement Expense Descriptions and Categories, which results in a recommendation to the Blanks Working Group to adopt Item 2025-26BWG. This item updates the annual statement expense categories and instructions to remove outdated expense terminology to reflect the current types of expenses that exist for companies.
• 2025-34: Updates on Economic Scenario Generator and Non-Variable Annuities, which makes changes to various SSAPs to reflect the current state of play on the implementation of the Generator of Economic Scenarios (GOES) and VM-22.
• 2025-01: Sale-Leaseback Clarification, which expands revisions to SSAP No. 22 – Leases to clarify the types of transactions that can utilize sale-leaseback accounting. The changes incorporate some of the suggested revisions proposed by APCIA and NAMIC. The revised guidance will be applied to all contracts in effect as of March 23, 2026.
• 2025-23: IMR Proof of Reinvestment, which incorporations the concept of an IMR Reinvestment Template as a required component for reporting entities to increase negative IMR. Companies are not required to complete the template, but companies that do not complete it will not be able to use realized losses from qualifying fixed income investment sales to move into, or increase, a net negative IMR balance. NAIC staff will incorporate industry’s changes into the IMR issue paper and proposed IMR reporting framework.
• 2025-28: Nonadmittance of Long-Term Repos, which revises SSAP No. 103 – Transfers and Servicing of Financial Assets and Extinguishments of Liabilities to eliminate the historical guidance that requires long-term repurchase agreements to be nonadmitted. The guidance would continue to require nonadmittance of long-term reverse repurchase agreements and incorporate guidance for how that nonadmittance should be reflected. There is a broader agenda item that is pending with the working group related to securities lending and repurchase agreements, which will likely result in additional clarifications.

Re-exposed the following item until May 1:

• 2025-27: SSAP No. 1 Modco/FWH Codes, which would revise the restricted asset disclosure requirement in SSAP No. 1 – Accounting Policies, Risks & Uncertainties, and Other Disclosures to add categories for modco assets, funds withheld assets, and collateral assets received and on the balance sheet (excluding collateral held under security lending and repo agreements reported on the balance sheet). Interested parties continue to recommend that modco and FWH assets be reported in the aggregate but not subject to individual restricted asset coding of any kind in the investment schedules. NAIC staff has questioned whether the current restricted asset codes in the investment schedules provide valuable information to regulators. NAIC staff sought feedback from the working group but did not receive comments from regulators or interested parties. See the corresponding Blanks Item 2025-29BWG, which SAPWG has suggested be deferred until this item is completed.

Deferred action or requested additional engagement on the following items:

• 2025-22: IMR Impact on Reinsurance Collateral, which would revise SSAP No. 61 – Life, Deposit-Type and Accident and Health Reinsurance to clarify how IMR derecognized by a cedant as part of a reinsurance transaction should impact the reinsurance collateral required to receive credit for reinsurance. The initial exposure proposed an asymmetrical approach whereby derecognized positive IMR increases collateral requirements but derecognized negative IMR does not decrease collateral requirements. Interested parties have advocated for symmetrical treatment, and the working group has sent a referral to the Reinsurance Task Force. The American Academy of Actuaries has put forth a middle-ground approach that would require a ceding company actuary to demonstrate (e.g., through cash flow testing) that the level of collateral would be sufficient under moderately adverse scenarios in order to allow collateral less than the policy reserves. NAIC staff recommended that the working group defer this item until a response is received from the Reinsurance Task Force. The Reinsurance Task Force will schedule a call to discuss the proposal. Rachel Hemphill (TX) suggested that regulators do not want to do anything to disincentivize reinsurance but also suggested that cash flow testing may not be a perfect solution.
• 2025-24: Commitments and Contingencies Disclosures, which would establish a comprehensive disclosure framework for a company’s commitments and contingent commitments. The initial proposal suggested that full transparency into a company’s commitments is essential and that these terms can govern the use of future cash flows, constrain liquidity, and shape an insurer’s overall risk profile. Interested parties have held several calls on this exposure and concluded that definitions need to be clarified and that the current exposure would result in inconsistent reporting. The working group directed NAIC staff to work with industry to refine the proposal. Additionally, NAIC staff also is seeking regulator feedback on RBC treatment for contingencies and commitments and requested a referral to the Capital Adequacy Task Force to receive their input on the topic. Kevin Clark (IA) noted that Iowa takes a broad interpretation of what should be included as a “Contingent Liability” in Note 14A1.
• 2025-26: SSAP No. 48 Equity Changes, which contains several areas where NAIC staff requested feedback related to SSAP 48 – Joint Ventures, Partnerships and Limited Liability Companies investments. The item proposes a review of several SSAP 48 concepts, to ensure guidance is clear and consistently applied. The working group directed NAIC staff to work with a limited industry focus group to develop a revised proposal. The goal is to draft a revised SSAP for exposure later this year.
• 2025-29: Reporting Clarification, which modifies several elements of the investment schedules and clarifies guidance—namely to reflect interpretations relating to the principle-based bond definition. The working group will sponsor a Blanks proposal related to several issues related to the bond definition, including payment due at maturity and origination balloon payment percentage. NAIC staff requested regulator comments on whether residuals should include a maturity date. Notable in this agenda item: NAIC staff agrees with industry’s comments related to the treatment of rated notes and feeder funds as ABS under the bond definition.

Exposed the following new items until May 1:

• 2025-13: Residential Mortgage Loans Held in Statutory Trusts Issue Paper, which details for historical purposes the discussions and conclusions that occurred when developing guidance for residential mortgage loans held in qualifying statutory trusts.
• 2026-01: Disclosure of FABNs and Similar Structures, which incorporates disclosures for funding agreement backed notes (FABNs) and other funding agreement backed structures. This proposal resulted from a referral from the Macroprudential Working Group (MWG). The MWG referral recommended that regulators capture the total of all funding agreements that back SPV issuances, with reporting that divides based on the type of agreement, whether the SPV-issued debt instruments are puttable, and if the terms of the debt agreement differ from the backing funding agreement. The disclosure recommendation would also capture information on the maturity distribution of the funding agreements that back SPV issuances, including whether the funding agreement has a fixed or floating rate. NAIC staff expanded the disclosure proposed by the MWG to capture the amount of BACV collateral pledged by the reporting entity to the SPV under the funding agreement–backed structures. From preliminary information received, this collateral pledged is common in funding agreement–backed repurchase agreements and funding agreement–backed loans.
• 2026-02: Valuation of Funds Withheld, which would revise annual statement instructions and SSAP No. 61 – Life, Deposit-Type and Accident and Health Reinsurance to clarify that funds withheld liabilities should be recorded equal to the book adjusted carrying value of the funds withheld assets.
• 2024-15: Asset Liability Management (ALM) Derivatives, as directed by the working group at the 2025 Fall National Meeting, NAIC staff has drafted proposed SSAP guidance and an issue paper for interest-rate hedging derivatives used for asset liability management. The guidance has been developed to utilize an amortized cost measurement method approach as well as to exclude asymmetrical derivatives. This item also includes transition guidance.

Heard updates on the following items:

• A memo to the Financial Condition Committee related to the Co-YRT survey to states regarding permitted practice authority: In connection with the 2025 changes made to the treatment of reinsurance arrangements that contain a coinsurance and YRT component, a survey was sent to states to determine whether tools were needed for jurisdictions that, as a policy, do not grant permitted practices. All respondents stated that no additional flexibility other than that provided through the permitted practice process was needed. The working group will send this update to the E Committee.
• Update on the IMR Ad Hoc Subgroup: The IMR Ad Hoc Subgroup continues to meet regularly. It is anticipated that the revised SSAP, draft issue paper, and documents that propose reporting revisions will be presented to the working group following the Spring National Meeting.
• Referral from the Life RBC Working Group on clarifications related to AVR equity reporting lines for common stock in SCAs and other affiliates: NAIC staff will collaborate with interested parties in identifying possible clarifications to respond to the referral from the Life RBC Working Group, which was received at the 2025 Summer National Meeting. The ACLI had previously raised questions regarding AVR equity reporting lines for common stock in SCAs and other affiliates and requested clarifications to the AVR instructions.
• Review of U.S. GAAP Exposures: There are currently no exposure documents open for comment by the Financial Accounting Standards Board (FASB).
• Update on IAIS Activities: NAIC staff monitors IAIS Audit and Accounting Working Group discussions. The last meeting was February 9, 2026; most of the items discussed were not relevant to the U.S. or SAPWG.

Third-Party Data and Models (H) Working Group

The working group discussed areas of the draft Risk-Based Regulatory Framework that Jason Lapham (Chair, CO) felt needed more clarity, spending the bulk of its time on registration considerations. Some notable points from the discussion:

• Registration: Lapham clarified that the proposed framework is intended to target registration of third-party data and model vendors, not the data or models themselves. Regulators explained that the working group settled on registration vs. licensure because it (1) would avoid compulsory exams with respect to licenses and (2) allows third parties to work directly with regulators instead of using insurers as a conduit for information. There was consensus among the working group that states need a better understanding of the industry, noting a lack of information about the third-party provider landscape—who they are, what’s offered, and where they’re operating. The working group contemplated whether the registration process should be mandatory. Some regulators noted mandatory registration may require legislative action in their states, some questioned whether states would receive any information if it wasn’t mandatory, and others already require third parties to file their models in SERFF (which could be an advantage to a mandatory process). No decision was made.
• Governance: Commissioner Ommen (IA) emphasized the importance of getting information about a third party’s governance framework and suggested a model law could be helpful, pointing to state and interested party requests for consistency.
• Pricing and Underwriting: Regulators ultimately agreed to focus the framework on pricing and underwriting due to increased use of predictive models by insurers in this area, while leaving open the possibility of examining other functions in the future.

Key questions remain regarding whether vendor registration should be mandatory, voluntary, or addressed via guidance or law, and if the process should be centralized through the NAIC. The drafting group will outline these considerations for further discussion, and a revised framework will be presented at the Summer National Meeting.

Prescription Drug Coverage (B) Working Group

Drug Formularies, Consumer Protections, and State Enforcement: Consumer representatives Wayne Turner (National Health Law Program) and Carl Schmid (HIV+Hepatitis Policy Institute) presented on consumer access to prescription drugs. They called for regulators to bring greater accountability for “adverse tiering,” enforce QHP Pharmacy and Therapeutics (P&T) Committee consumer representation responsibilities, and require insurers to provide prospective enrollee access to clinical criteria used for formularies, exceptions processes, and utilization management (including prior authorization). Schmid called for CCIIO to update its formulary review tools as he asserted preventive HIV medications are still not being covered in outlier cases. In the absence of robust federal reviews, Schmid recommended state regulators fully review plans for drug coverage, tier placement, and preventative services cost-sharing protections, as well as respond to consumer complaints.

Drug Discount Cards and Related Issues: As forecasted at the Fall National Meeting, the working group received information about discount cards, but not from the industry as Joylyn Fix (Chair, WV) had inquired. Instead, Alabama pharmacist and new state regulator Kelli Littlejohn Newman (AL) discussed key issues about pharmacy benefit reimbursement, financing arrangements, and the full drug distribution chain. Much of the content from her remarks about drug discount cards came from alleged interactions among the card administrator, manufacturers, PBMs, and dispensing pharmacy according to court filings in pending litigation. She emphasized that while pharmacy is a complicated benefit, regulators must stay neutral and implement the laws in their state as written and avoid taking a side (other than to work to ensure a patient receives benefits to which they’re owed). No working group members posed questions as time ran out. 

Pharmacy Benefit Management (D) Working Group

Examination Chapter Revisions Expected: The working group considered the current draft of the inaugural PBM examination chapter. The working group did not advance the chapter, after a summary of Kelli Littlejohn Newman’s (AL) written comments on the chapter related to key areas such as the scope and confidentiality of information requested in an examination, rebates, claims, and utilization sections; Newman also advocated for a more “proactive” stance in the chapter on collecting information on use of AI, such as in utilization management. A representative from the PBM coalition recommended the working group continue to work on the draft and offered to be a resource. After some back and forth, the consensus of the working group was to review Alabama’s recent comments and hold an interim meeting that presumably will include an updated draft for consideration.

Federal Update: The working group also heard oral updates from NAIC legal counsel Allison Shields on the recent FTC settlement with one PBM on alleged insulin practices and federal legislation enacting PBM reforms in the Medicare Part D and commercial insurance (including ERISA plan) markets. Shields offered that the new federal reforms could allow for a harmonizing effect between federal and state requirements addressing rebates, network access, steering, and reimbursement and provide an opportunity for federal and state regulators to work together, such as through transparency reporting requirements.

State Based Systems Complaint Module on Track: Soon-to-be-retired Susan Jennette (DE) gave a quick update that the SBS PBM complaints module project is on track to be launched at the end of the year.

Aggregation Method Implementation (G) Working Group

Exposed Draft Group Solvency Regulation Review until May 11: The working group exposed until May 11 its draft review of U.S. Group Solvency Regulation. Recall that the review was conducted to identify any gaps in U.S. group solvency regulation that need to be addressed to ensure the Final Aggregation Method (AM) is a comparable implementation of the Insurance Capital Standard (ICS). The draft recommends some updates to the Final AM, as well as the Group Capital Calculation and ORSA Guidance Manual (which will be referred to the Financial Condition Committee after adoption). Overall, the review concludes that the U.S. framework provides a robust and credible foundation for an aggregation-based implementation of the ICS, captures relevant risks, and supports effective supervision at the group and legal entity level.

Public Disclosure & Reporting Requirements: The working group continues to think through how the Final AM will implement ComFrame’s public disclosure and reporting requirements. The draft review states that once the ComFrame requirements are finalized by the IAIS (expected at the end of the year), the working group intends to develop options for how they could be implemented for the AM, considering factors such as the outcome to be achieved, reliance on existing legal entity level reporting, and information needed to aggregate legal entity results across the IAIG.

Next Steps: The working group will schedule two calls in June to discuss comments received and then consider the updated draft for adoption before sending it to the G Committee for consideration.

Life Insurance and Annuities (A) Committee

Presentation on Annuity Illustrations: Ben Slutsker (MN) and Russ Gibson (IA) presented on annuity illustrations, primarily focused on fixed indexed annuities, noting concerns with length (averaging 21 pages), high illustrated returns (some as high as 22%), complexity, use of proprietary indices, and back-casting practices. Slutsker also reported on the activity of the Life Insurance and Annuity Illustrations Working Group, which collected feedback on short- and long-term solutions to ensure consumers receive reasonable expectations for annuity returns. Commissioner White (VA) raised questions about the unrealistic returns and complexity of the documents (specifically whether this is a broad issue or if some insurers are presenting understandable materials). Regarding the high returns, Slutsker explained that regulators have generally seen convergence among companies, stating “if they want to make sales, they almost have to,” but that a few carriers expressed discomfort illustrating that high. He also reported that every illustration reviewed was complex and pointed to the low adoption of Model #245 as a possible contributor.

New “Market Data and Scanning” Priority: Relatedly, Director Fox (Vice Chair, MI) reported that NAIC leadership has asked the committee to collaborate with the Market Regulation and Consumer Affairs (D) Committee to collect and analyze data to ensure compliance with the marketing and sales of life insurance products. Fox, who is leading the effort, explained a growing disconnect between what’s sold to consumers and what the consumer believes they are buying, and that, for example, the NAIC lacks a system to monitor whether annuities are performing as projected in illustrations. One aspect of the committee’s work will focus on how consumers perceive and use illustrations, which will complement the technical activity of the Life Insurance and Annuities Illustrations Working Group. Fox and Tim Mullen (NAIC) noted that the committee intends to look at MCAS data and consumer education materials, among other inputs. As a first step, the committee is seeking feedback on ways technology can be used to improve market regulation (including advertising, marketing, and sales of products) for the benefit of consumers so regulators can be more proactive. Comments are due April 30.

International Insurance Relations (G) Committee followed by IAIS Secretariat Q&A Session with Interested Parties

Roundtable Discussion on IAIS Committee Activity: The committee held a roundtable discussion to hear from its members who are actively engaged in the work of the International Association of Insurance Supervisors (IAIS).

• Implementation Assessment Committee (IAC): Commissioner Lara (CA) serves on the committee with Director Gillespie (IL) and Rashmi Sutton (NAIC, IAC Vice Chair). Part of the IAC’s work this year will be focused on ICS implementation.
• Monitoring and Risk Assessment Committee (MRC): Commissioner Houdek (WI) serves on the committee with Commissioner Ommen (IA) and Director Dunning (NE). A large focus of the MRC’s work is focused on the annual Global Monitoring Exercise (GME), which just launched—the results will be analyzed over the summer. The MRC is participating in the next phase of work related to structural shifts in the life insurance sector through enhanced data collection and systemic risk analysis of alternative asset investments and asset-intensive reinsurance.
• Standards and Supervisory Practices Committee (SSC): Director French (OH) serves as Co-Chair of the SSC, alongside Director Fox (MI), Superintendent Kane (NM), and Ryan Workman (NAIC). Notably, the SSC is overseeing 20 projects, including development of supporting material and supervisory guidance on structural shifts in the life insurance sector, development of ICS implementation materials, and updates to the recovery and resolution application papers.
• Climate Risk Steering Group (CRSG): Commissioner Arnold (MN) reported that the CRSG’s work this year will build off last year’s Application Paper on climate risk and noted the continued climate related inputs to the GME.

2026 International Insurance Forum: Director Dunning (Chair, NE) previewed the NAIC’s upcoming International Insurance Forum, scheduled for May 7–8 in Washington, DC. Dunning encouraged attendees to register soon before it fills up—at the time of the meeting, the conference was at 75% capacity.

IAIS Q&A: Jonathan Dixon (IAIS Secretary General) and Danita Pattemore (IAIS Capital and Solvency) provided a presentation on the IAIS 2026–2027 workplan, which includes considerable follow-up work from the Issues Paper on structural shifts in the life insurance sector (noted in committee updates above). In 2027, the IAIS will publish a consultation on the availability of capital, which spurred an interested party request for more detail. Pattemore explained the paper will focus on how capital is moved between the group (noting that the IAIS no longer uses the term ‘fungibility’) and examine any associated issues. Work is in the early stages, but it is not expected to result in any changes to the ICS.

Senior Issues (B) Task Force

MedSupp Discussion: After receiving an industry-informed perspective on the MedSupp market by attorney Bill Schiffbauer on the trade-offs with establishing birthday rules and other policies to increase access to guaranteed-issue MedSupp policies, task force members were asked to submit information on whether their state has the birthday rule in place and what issues they are seeing. Ned Gaines (Chair, NV) noted it was a “good idea” to also compile states’ MedSupp rating methodologies, given wide variation. Consumer representative Lucy Culp (Blood Cancer United) asked that the next meeting on the topic be open to the public, and AHIP’s Owen Urech offered to be a resource to provide the industry’s perspective, after it was noted that no individual companies had been willing to speak in public to the task force.

LTC Riders: Commissioner Gaines (Chair, NV) kicked off a long discussion among task force members on LTC riders by reminding members of a request to provide information on how their departments process LTC riders and noted that the task force plans to study this area this year, with the goal of creating more consistency in how states review riders and additional consumer protections. The task force may also make a referral to an actuarial task force (TBD) on specific pricing questions, though several regulators and interested parties flagged a number of threshold policy questions that they argued should rest with the SITF to inform any actuarial work. The task force also discussed several other fundamental issues like portability, consumer illustrations, and whether a filing is more appropriate for the Compact’s review or an individual state’s review. A presentation by consumer representatives Bonnie Burns and Amy Killelea built on the prior discussion with a summary of their recent LTC report, which was also presented at the Consumer Liaison Committee meeting.

LTC Insurance Fraud Study: Michelle Rafeld of the Coalition Against Insurance Fraud (CAIF) discussed CAIF’s recent work and study (to be released soon) on LTC insurance fraud. CAIF performed a survey of which 12 LTC insurance carriers participated, including those offering hybrid products.

In other matters, Martin Swanson (NE) encouraged task force members to review CMS’s recent response to the state that prompted his state to issue guidance allowing consultants, who must be licensed producers, to charge a fee to consumers in connection with enrolling a consumer into a Medicare Advantage (MA) plan when a commission is not available from the MA plan. The state also plans to conduct training on best practices for consultants and will consider what is a reasonable charge at a later time. Commissioner Gaines shared that Nevada has a consultant license but has only two licensees.

Capital Adequacy (E) Task Force

Adopted Item 2025-17-L (L027 Scope Clarifications), which clarifies that reserve for payout annuities resulting from variable annuities under VM-21 should exclude such reserve from the Interest Rate Risk and Market Risk calculation. The change clarifies that such annuities should be included in the C-3, Phase II calculation.

Exposed Item 2025-15-CA (A&H Underwriting Risk Structure Change) until April 23, which updates the structure of several pages of the RBC formula based on the recommendations from the American Academy of Actuaries’ H-2 Underwriting Risk Report. The report presented a revised structure to more closely align the underwriting risk pages with the lines of business as presented in the Analysis of Operations page. In addition to the health formula, these changes are also being proposed to the life and P&C formulas to mirror the line of business changes. The Academy noted that the proposal accurately implements its recommendations.

Exposed Item 2026-05-CA (Remove Investment Affiliate Code 4) until April 23, which eliminates investment subsidiary references from the RBC formula and instructions. The investment subsidiary concept was removed from the statutory accounting framework in 2025. Kevin Clark (IA) provided background on the change, noting that companies can still own investment subsidiaries, but they must be valued under SSAP 97 and will not receive look-through treatment. Clark highlighted the recently adopted revisions to SSAP No. 37, which allow residential mortgage loans held in qualified statutory trusts to receive look-through treatment, as a mitigant to company impact from these changes.

Academy Previews Future Analysis of RBC and Impairment Risk: The Academy presented its RBC/impairment risk analysis for the fourth time at the national meeting. In response to a question from Matt Cheung (IL), the Academy noted that future work would shift the analysis and look at impaired companies and analyze changes to their RBC. The Academy also plans to build on the Society of Actuaries’ prior research, which looked at how certain factors impacted risk and the “root causes” of insolvencies.

Health Care Affordability and Mitigation (B) Working Group

Discussed Potential 2026 Focus Areas: The working group discussed potential topics for its 2026 work plan but selected none. The working group instead planned to close out its solicitation of topics from states and interested parties by the end of March and then review the topics submitted. Topics might be prioritized if certain factors apply, such as whether other task forces or working groups are already working on submitted topics and whether commenters can show evidence of success, particularly in rural areas.

Heard Two Presentations from Consumer Representatives:

• The first on Hospital Pricing, Affordability Challenges and Potential Solutions discussed financial transparency in hospitals and price controls, noting that states should be sensitive to different features of their state (such as whether to apply price controls to rural or independent hospitals).
• The second presentation, How State-Based Marketplaces (SBMs) Can Make Coverage More Affordable, highlighted the role of an SBM and emphasized the positive impact on affordability with standardized plan options and the reduction in barriers to enrollment. Presenters encouraged states to develop a state-funded premium wrap (as has been done in Connecticut, Colorado, Maryland, and New Jersey).

Accounting Practices and Procedures (E) Task Force

The task force received reports from the Statutory Accounting Principles Working Group (SAPWG) and Blanks Working Group. Comments on the current Blanks exposures are due April 28, and comments on the SAPWG exposures are due May 1.

ERISA and Alternative Health Coverage (B) Working Group

ERISA Preemption and State PBM Laws Guidance Document to be Re-exposed: Andria Seip (Chair, IA) provided a series of updates on the working group’s preemption of pharmacy benefit manager (PBM) laws guidance document. First, because the comments received on the document were “intricate,” the working group agreed to resume biweekly drafting group meetings to work through revisions and re-expose a new draft at a public meeting, in which Seip also plans to explain the revisions made. In response to some initial feedback, Seip clarified that the guidance document will not be incorporated into the ERISA Handbook, given the latter reflects settled law while the former discusses unsettled issues such as active litigation. Seip also mentioned the purpose of the document will be to provide facts and not take positions on what is good or bad public policy. Kelli Littlejohn Newman (AL) will join the drafting group as an interested regulator.

Forthcoming Level-Funded Plan Exposure Draft: Seip provided a brief update on a future paper on level-funded plans. She asked for volunteers for a working group to produce and solicit public comments on a draft paper (taking a draft started by retired former ERISA Working Group Chair Bob Wake (ME)). Martin Swanson (NE) suggested consulting with the U.S. Department of Labor in the drafting process.

Discussed New Charge on Alternative Health Coverage: Working group members discussed ideas to tackle its new charge focused on studying alternative health coverage. States and interested parties are encouraged to provide feedback on what the working group should do to implement the charge as soon as possible, but no later than April 30. The most concrete idea, put forth by Seip at the meeting, is to produce a resource on state regulation of alternative health coverage products, which may also include enforcement actions on the same. Seip observed a rise in fixed indemnity product filings and added that Iowa’s short-term limited duration insurance laws require certain prescription drug and mental health and substance use disorder benefits, and set a maximum out-of-pocket limit.

• Consumer representatives Lucy Culp (Blood Cancer United) and Chris Peterson agreed with the utility of referencing the NAIC’s Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (#171) and its companion model act, the Supplementary and Short-Term Health Insurance Minimum Standards Model Act (#170) as a helpful reference point for defining the products within scope and comparing state laws in place with the model’s provisions. Culp requested that states share information on the increase in filings and enrollment in alternative coverage. In response to an observation offered by Peterson that the regulatory concerns with these products seem to stem from their marketing rather than the plan design, Wisconsin’s legal counsel remarked that her state is undertaking many investigations and suggested carriers terminate agents identified as inappropriately selling the products.
• There appears to be consensus to include a broad range of alternative coverage types, including farm bureau coverage and health care sharing ministries, and to include enforcement actions, if the repository idea moves forward.

Upcoming Regulator-Only Meeting: Seip ended the meeting announcing an upcoming joint regulator-only meeting with the Improper Marketing of Health Insurance (D) Working Group to discuss investigations related to “creative” marketing of health insurance products. The exact date was not shared.

Big Data and Artificial Intelligence (H) Working Group

Update on Artificial Intelligence (AI) Systems Evaluation Tool Pilot: Commissioner Nathan Houdek (WI) provided an update on the AI Systems Evaluation Tool Pilot. The pilot began earlier this month, with participating states reaching out to companies involved in the pilot. States have generally contacted their targeted companies, with some initial outreach still required. Commissioner Houdek noted that generally, each state is contacting 1–10 companies for the pilot, with a small number of states involving more than 10 companies. The pilot is being conducted as part of financial examinations, market examinations, and general regulatory questions. The commissioners emphasized that responses to the tool will retain confidentiality protections pursuant to the applicable state examination and analysis authority regardless of the method of outreach. Commissioner Houdek also noted that the working group will coordinate feedback from participating states and companies for further revisions to the tool.

Panel Discussion on AI Governance Trends with Scott Kosnoff and Anthony Habayeb: Scott Kosnoff (Faegre Drinker) and Anthony Habayeb (Monitaur) spoke to the committee on current AI governance trends in the insurance industry. Habayeb focused on the importance of effective governance in insurance companies, including cross-functional governance and the challenges associated with having people from different functional areas work together. He also spoke to insurance companies’ growing expectations on AI vendors and how vendors are acknowledging that they need to provide certain levels of information on governance and testing to insurance companies. Kosnoff spoke on the importance of having a good story to tell that shows an insurance company is properly evaluating the risk associated with the use of AI and taking steps to mitigate such risk. An AI Use Case Intake Form can help in this review as it (i) forces proponents to think critically about what they are asking their AI governance committee to review and (ii) provides a starting point for the AI governance committee to perform its own review. Kosnoff also mentioned that insurance companies often struggle with understanding the scope of regulatory reviews and expectations. As the committee works through the AI Systems Evaluation Tool Pilot, working with insurers to ensure they understand the scope of the pilot will be helpful.

Presentation on How to Operationalize the NAIC’s AI Model Bulletin: Dr. Dorothy L. Andrews, Senior Behavioral Data Scientist and Actuary with the NAIC Research and Actuarial Department, presented on a potential format for how regulators may operationalize the NAIC’s AI Model Bulletin after adoption. The proposed format would include companies preparing an AI compliance report for review by regulators to show compliance with the AI Model Bulletin. The compliance report would focus on the items addressed in the AI Model Bulletin, including (i) internal and external models and data sources, (ii) the use of AI model cards, (iii) model drift and evaluation techniques, and (iv) protected class and bias testing. The compliance report would serve as a starting point for regulators to receive information and review company compliance, with the opportunity to ask additional questions and request additional information following the report.

Discussion of Federal AI Developments: The working group briefly discussed the White House’s National Policy Framework for Artificial Intelligence, noting that the framework is consistent with recent AI rhetoric from the executive branch. Key areas of the framework for the working group are its positions that (i) the national framework should rely on existing agencies and departments rather than creating a new AI-focused agency or department and (ii) any national framework should preempt state laws.

Cybersecurity (H) Working Group

The working group heard a presentation on cyber threats and trends from William Altman (CyberCube), highlighting current AI threats and developments. The presentation noted that ransomware continues to be an issue for companies. The U.S. remains a hotspot for ransomware threats, but increases in ransomware activity have been seen in countries with either digitized or developing economies. Additionally, the growing development of AI has increased the ability to both globalize and personalize ransomware and other cyberattacks. The growing use of AI is also creating a cybersecurity concern. Altman emphasized that the use of AI in coding creates additional vulnerabilities. With the use of AI and agentic agents by threat actors, the vulnerabilities are found quicker and exploited. Because of this risk, companies should focus not just on preventing cyber issues, but on ensuring that they have protocols and training in place for what to do when a cyberattack occurs to ensure resilience.

Innovation, Cybersecurity, and Technology (H) Committee

Update on the Cybersecurity Event Notification Portal: The committee provided an update on its proposal to develop a Cybersecurity Event Notification Portal. It reiterated the events of the Cybersecurity Working Group’s March 13 meeting, wherein the working group adopted the Cybersecurity Event Notification Portal Project Intake Form. The committee plans to hold a meeting in April to further discuss the portal project.

Presentation on Insurance AI Trends, Including Agentic AI Applications: The committee heard a presentation from PwC focused on current AI governance trends among insurance companies, and the developing governance needs in light of advances in AI and the adoption of agentic AI models. Notably, the presenters stated that companies wishing to adopt agentic AI will need to update their AI and data governance procedures to ensure that systems will work across functional areas and that processes are looking at AI from a lifecycle and process perspective rather than at any singular point in time. Regulators asked questions regarding the impact of future developments in AI, and speakers responded with recommendations to ensure that AI governance expectations and requirements evolve with the technology.

Joint Meeting of the Investment Designation Analysis (E) Working Group and the Invested Assets (E) Task Force

Exposed Two Proposed Amendments to the P&P Manual until April 24: The SVO proposed the following amendments to the P&P Manual, which were exposed until April 24: (1) a nonsubstantive technical amendment to reflect an updated name (HR Ratings LLC) on the List of NAIC Credit Rating Providers; and (2) an update to the Parent-Subsidiary Situations language to clarify that the SVO can rely on other information it deems satisfactory to support its use of the financial statements of an issuing subsidiary’s parent—the SVO noted that the current language doesn’t reflect the latitude actually permitted.

Issued Referrals to CapAd, SAPWG, and Blanks related to Security Identifiers: The SVO is recommending updates to the financial statement investment schedules that would consolidate the existing security identifiers (as well as a new identifier—S&P Global’s LoanX ID) into a single reporting field and add a new field to identify the Security ID type. The SVO also recommends defining two special situation Security IDs to address two common reporting issues: (1) when securities acquired within an initial reporting year have not yet been issued an NAIC recognized security ID (but one has been requested), and (2) when securities are not expected to receive a security ID. The requests have been sent to the relevant groups for feedback.

Heard an Update on the SVO’s Annual Report on Carry-Over Filings for 2025: The SVO’s 2025 Carry-Over Filings Report has shown year over year increases in the percentage of carry-over filings (those filed with the SVO but not completed by year-end), driven primarily by a substantial increase in PLR filings, indicating staff constraints and the need for additional resources. The working group will consider addressing the SVO’s resource needs since the trend is likely to continue.

Heard a Presentation on Insurer Investments in Residential Mortgage Loans: The task force received a detailed presentation from Neuberger Berman on insurer investments in residential mortgage loans as part of the task force’s effort to educate members on increased exposure to certain asset classes. The presenters provided information on the varying debt used to finance residential real estate, noting that the asset has consistently offered and delivered highly attractive risk-adjusted returns. Steve Smith noted that life companies receive much more favorable RBC treatment for investments in mortgage loans than P&C and health companies; as such, most of the increase in investment in this asset class is limited to the life industry.

CRP Due Diligence Framework Exposure Expected Soon: The Investment Designation Analysis Working Group met in regulator-only session on March 10 to receive a presentation from PwC on its Credit Rating Provider (CRP) due diligence framework proposal and results from its data call. The working group plans to meet in late April and would like to be in a position to expose the framework for comment at that time.

Executive (EX) Committee

Hearing on NAIC Open Meetings Policy: The Executive Committee received written and verbal comments on the NAIC Policy Statement on Open Meetings, with interested parties voicing support for transparent, open meetings.

• Consumer representative Michael DeLong (Consumer Federation of America) advocated for greater transparency at NAIC meetings, including having free and easy access to livestreams and recordings of all open meetings, which many commenters supported.
• Consumer representatives Peter Gould and Dick Weber (as well as representatives from NAMIC, APCIA, and AHIP) emphasized the need for a clear statement and reason for regulator-only meetings, and to post a general public summary following those meetings (with no confidential information included). In response, regulators requested examples of when a closed meeting produced a work product that had not received public comments, to which no commenter was able to provide.

No next step was decided, but Commissioner White (VA) noted his appreciation for stakeholder participation thus far.

Model Law Development Request Approved: The committee also approved the proposal to develop a model law for state-administered mitigation programs and the 2026 updated charges for the Natural Catastrophe Risk and Resilience Task Force.

Joint Meeting of the Executive (EX) Committee and Plenary

The Executive Committee and Plenary adopted the reports of the lead policymaking (or “letter”) committees through a comprehensive consent agenda. Plenary took a separate unanimous vote to formally adopt the Restructuring Mechanisms White Paper. In introducing the white paper, Commissioner Mulready (OK) gave background on its purpose and context, the history of its adoption, and related activity. He also noted that development of the paper covered seven years, spanning his career as an elected commissioner.

Health Insurance and Managed Care (B) Committee

Adopted State Flexibility White Paper: The committee adopted the state flexibility white paper, which discusses key policy levers for states through the ACA Section 1331 basic health program, Section 1332 state innovation waiver, and Section 1333 health insurance compact authorities. The paper was amended in response to comments from Idaho and Georgia requesting some conditional language about the benefits of state reinsurance programs to subsidized enrollees, with the sentence now reading, “Consumers who are eligible for premium tax credits may not always see direct benefit from a reinsurance program, depending on the structure and scope of the program.”

Update on CMS Priorities: Two CMS leaders provided an update on CMS priorities.

• Medicare Priorities: Alec Aramanda, Deputy Director of the Center for Medicare & Medicaid Services, emphasized a desire to deepen the Center’s relationship with states through efforts like monthly meetings with the Senior Issues Task Force and addressing state issues within CMS’ jurisdiction. Aramanda emphasized CMS’ statutory obligation to provide consistency in the administration of the Medicare Advantage program, particularly in operational and policy areas like marketing of plans, network adequacy, and benefits, while states retain authority over licensing and solvency, including the licensing of Medicare Advantage producers. Aramanda laid out two principles for the broader CMS: (1) make America healthy again through addressing underlying chronic conditions and prevention where possible; and (2) “subsidiarity” in which decisions are made at the most local level possible, even for Medicare. Regarding Traditional Medicare, Aramanda touched on moving away from volume to value, addressing consolidation’s effect on quality, and accountable care. Aramanda also touched on policy priorities in Medicare Advantage related to reducing complexity and increasing accuracy for risk adjustment; incentivizing genuine clinical care improvements in the Star Ratings program; and keeping plans accountable in their voluntary prior authorization reforms (a sentiment echoed by CMS-CCIIO’s Jeff Wu). Finally, Aramanda touted the complaints tracking module (CTM) portal now available to states that allows trained DOI staff to use the module to report and track MA-related complaints. Aramanda said he would follow up with Director Cameron (ID) about how many carriers CMS has terminated, as well as point to other enforcement actions given CMS’ goal is not to terminate a carrier but produce compliance.
• Marketplace Priorities: CMS’ Peter Nelson of CCIIO (a frequent B Committee speaker) summarized a few CMS priorities in the recently proposed CY2027 NBPP rule (and some outside of it). Within the NBPP, Nelson discussed proposals to implement new statutory changes related to pre-enrollment verification for Exchange consumers, permitting direct primary care arrangements to be paired with an HSA-qualifying plan and removing standardized plan requirements and limits for non-standardized plans, and the new proposed regulatory frameworks to allow non-network QHPs and multi-year bronze and catastrophic plans. Consistent with some commentary by CMS’ Wu at HATF, Nelson acknowledged the new regulatory frameworks could take a few years to implement, but he did not explicitly say that these policies would not be finalized in the final CY2027 NBPP. Nelson added that CMS continues to work on rules for ICHRAs to make them work better and will monitor any risk selection issues as employers enter the space. In response to Commissioner Arnold’s (Chair, MN) question on timing of the NBPP, Nelson said he expects the rate review timeline to operate as normal even without the NBPP being finalized, to which Arnold asked CMS to consider delaying the applicability of any provisions that would change certifications. Commissioner Pike (UT) expressed some support for the NBPP and transparency measures including multi-year plans but noted his frustration with the delay in CMS’ decision of the state’s application to update its EHB benchmark plan. Nelson responded that CMS is still working through how to develop the EHB framework in a way that aligns with the statute.

State Affordability Levers: Commissioner Arnold teed up a presentation by state consultant Michael Bailit about policy options for states to improve affordability, noting that the presentation will inform the committee’s work this year. Bailit’s presentation focused on how levers to address the cost of care, particularly prescription drugs in recent years, have contributed greatly to the affordability “crisis.” While many interventions are new and have not been evaluated fully (with the exception of the longstanding Maryland all-payer global hospital budget model), Bailit discussed state experimentation in the areas of non-prescriptive measurement, transparency, and collaboration; price caps (for hospitals and less so prescription drugs); site-neutral payments and facility fee bans; price growth caps for hospitals and pharmacy benefits; and strategies to increase market competition and respond to market changes like a public option, pre-transaction review of consolidation, and strengthening state corporate practice of medicine laws.