Federal Updates

Following the Trump Administration’s executive order aimed at expanding options for 401(k) investors, the Department of Labor (DOL) has released an asset-neutral rule establishing a safe harbor process. This process outlines six factors that a direct contribution plan fiduciary may consider when evaluating assets for inclusion in a plan’s lineup: performance, fees, liquidity, valuation, performance benchmarks, and complexity. If a fiduciary considers these factors, they will establish a rebuttable presumption of having satisfied ERISA’s duty of prudence. In its press release announcing the rule, the DOL stated that the goal is to broaden the asset classes available in 401(k) plans. The rule is also explicitly designed to reduce litigation risk, as highlighted in the Executive Summary. Comments are due by June 1, 2026.

In other federal news, the House Financial Services Committee has a busy schedule this month, noticing the following relevant hearings:

• April 15 at 10:00 a.m. ET: Safeguarding Main Street: Combatting Fraud and Exploitation in Our Capital Markets (Subcommittee on Capital Markets)
• April 16 at 10:00 a.m. ET: Promoting Access to Credit for Everyday Americans (Subcommittee on Financial Institutions)
• April 22 at 10:00 a.m. ET: Diversifying Risk: The Benefits of Reinsurance and Credit Risk Transfers (Subcommittee on Housing and Insurance)
• April 28 at 10:00 a.m. ET: Prioritizing Main Street: Evaluating the Impact of Capital Proposals on Economic Growth and American Communities (Full Committee)
• April 29 at 10:00 a.m. ET: Examining Derivatives’ Role in the Treasury Market (Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity)

On March 25, the Financial Stability Oversight Council (FSOC) exposed its proposed interpretive guidance on nonbank financial company designations until May 14. The guidance largely reverts to the 2019 Interpretive Guidance and, if adopted, would replace the 2023 Interpretive Guidance and Analytic Framework.

On April 1, the Treasury Department announced its intention to convene meetings with domestic and international insurance regulators focused on recent developments in the private credit markets. The first series of meetings “will allow participants to survey recent market events, emerging risks, risk management practices, and outlooks for the sector.” Treasury anticipates that these meetings will facilitate greater collaboration amongst state insurance regulators and Treasury. The series of meetings is scheduled to begin in April and continue through early May, with additional gatherings planned throughout the summer. Interestingly, this comes on the heels of comments from Federal Reserve Chair Jerome Powell suggesting that the Federal Reserve does not see connections between the private credit markets and the banking system that might result in contagion risk.

NAIC Updates

Life Insurance and Annuities Illustrations Working Group: On March 31, 2026, the Life Insurance and Annuities Illustrations Working Group heard comments on potential short- and long-term solutions to address concerns regarding high illustrated index annuity returns. Discussion primarily focused on the effectiveness of the Annuity Disclosure Model Regulation (#245), possible new disclosure requirements, and insurers’ use of historical performance. Ben Slutsker (Chair, MN) stressed completing short-term solutions within a year, followed by long-term modernization efforts.

Next Steps: The questions below are exposed until May 18. The working group will meet in late May to discuss feedback and determine a path forward.

• What should be the starting point of a short-term solution: Model 245 language or something else (such as AG 49-A, other guidance, or starting anew)?
• If language similar to Model 245 or other existing guidance is used, what types of modifications do you believe are necessary to address current regulatory concerns regarding illustrated rates and transparency (i.e., which sections/parts do you believe need to be added or modified)?
• If starting anew, how can the scope be limited to ensure progress toward a short-term solution before a longer-term solution is developed?

Discussion Highlights: The working group heard a range of feedback from regulators, consumer reps, and industry:

• Regulator Views: Several regulators advocated for a thorough evaluation of Model #245’s impact. Michigan recommended updating consumer educational materials and alerts in the short term and potentially revising Model #245 in the long term after reviewing other existing models and regulatory tools. Utah critiqued the reliance on historical performance and back-tested data, arguing that projections should be purely hypothetical, not guided by past strategy performance. Regulators collectively supported a swift timeline for addressing these concerns. California questioned whether there are fundamental differences between indexed accounts in life insurance and annuities that would demand a different approach to calculating illustrated rates. As a result, the working group suggested there may be value in examining components of AG 49.
• Consumer Representative Views: Consumer representatives warned that increased disclosure does not solve the complexity of these products, which often overwhelm consumers. Birny Birnbaum recommended eliminating hypothetical return projections, asserting that such projections require expertise most buyers lack and incentivize cherry-picking of favorable components. Consumer groups also stressed the need for robust consumer testing and urged efforts to simplify products. Bonnie Burns (California Health Advocates) highlighted concerns about riders like long-term care benefits, which add to product complexity and are rarely well-explained in existing disclosures.
• Industry Views: Industry participants generally acknowledged the issues raised by regulators and consumer representatives but offered varying perspectives on potential solutions. The ACLI supported broader adoption of Model #245 as a practical short-term approach to achieve greater consistency in illustrations and disclosures. The American Academy of Actuaries recommended a comparison of illustrated rates and disclosures in states that have adopted the Model versus those that have not. Others agreed with consumer representatives that the Model is fundamentally flawed and should be modernized or replaced. There was also support for strengthening regulatory standards for bespoke indices and for limiting the use of historical performance in illustrations. The ACLI emphasized that any future work should be grounded in an understanding of how the current framework does or does not meet regulatory and consumer expectations.

Blanks Working Group: Without holding a meeting, the Blanks Working Group exposed the following items for a public comment period ending April 28:

• 2026-05BWG, which would update blanks instructions to explicitly require identification of instances where the Net Asset Value (NAV) method is utilized. This item would require the inclusion of NAV information in the Fair Value Hierarchy Level and Method Used to Obtain Fair Value Code columns to provide a single, consistent location for this information.
• 2026-06BWG, which would update Note 5L(1) to add a reconciling adjustment to identify the assets pledged under multiple arrangements.
• 2026-07BWG, which would incorporate clarifying revisions to the blanks instructions for completing certain investment reporting columns (payment due at maturity, origination balloon payment and Schedule BA maturity date). It also limits the reporting scope for the payment due at maturity on both Schedule D-1-1 and Schedule D-1-2. This item effectuates the changes adopted by SAPWG in Item 2025-29.
• 2026-08BWG, which would update Schedule T in the Annual Statement to allow for an additional option in the list of active status codes to include an “O - Other” category for reporting entities that have a unique, restricted license type that does not fit into one of the other existing categories. This category would be used by captive insurers, international insurers, or other types of insurers that have received an insurance authorization from a U.S. jurisdiction but do not qualify as fully admitted carriers and do not fit into one of the other categories.
• 2026-09BWG, which would update the Five-Year Historical page to add a line reporting short-term and cash equivalent affiliated investments.
• 2026-10BWG, which would update references to the valuation of the liability for a funds withheld arrangement. This item clarifies that such liabilities should be reported on a book/adjusted carrying value.
• 2026-11BWG, which updates Note 5a – Mortgage Loans to add a paragraph to disclose mortgage loans acquired through a qualifying investment in a qualifying statutory trust.

Compact Product Standards Committee: The Compact Product Standards Committee (PSC) met briefly on March 31 to discuss comments on the ACLI’s requested amendments to both the Individual Immediate Non-Variable Annuity Contract Standards and the Individual Deferred Paid-Up Non-Variable Annuity Contract Standards. There were no commenters beyond those of the ACLI, and the PSC planned to consider the amendments further during its regulator-only call on April 7.

Life Insurance and Annuities (A) Committee: As previewed during the Spring National Meeting, the Life Insurance and Annuities (A) Committee exposed the following for comment until April 30: Are there ways that technology can be used to improve market regulation (related to advertising, marketing, and sales) for the benefit of consumers? In particular, are there ways that regulators can be more proactive rather than retrospective? For example:

• Are there tools to evaluate and compare projected accumulations in an annuity illustration at time of sale with subsequent actual performance? This could help identify which annuities significantly fail to meet projections or require an update to the illustration.
• Are there tools that could be used to monitor independent marketing organization (IMO) compensation incentives?
• Are there efficient ways to monitor what consumers actually see?
• Are there ways to aggregate findings to provide early feedback to industry to encourage course correction in real time?
• Are there any other ideas or suggestions we should consider?

International Developments

On March 31, 2026, the International Association of Insurance Supervisors (IAIS) published two Targeted Jurisdictional Assessment (TJA) reports detailing an aggregate overview of the reviewed jurisdictions’ implementation of Holistic Framework supervisory material.

Progress Report on 2022 TJA: The 2025 Progress Monitoring Exercise evaluated progress made by the 10 jurisdictions assessed in 2022 (Canada, China, Hong Kong, France, Germany, Japan, the Netherlands, Switzerland, the United Kingdom, and the United States). The assessment focused on gaps identified in 2022, which related to resolution powers, recovery and resolution planning, crisis management, liquidity risk management and disclosure, macroprudential supervision, and internationally active insurance group (IAIG) determination. The IAIS reported considerable progress in all areas but still identified gaps related to resolution powers and planning and liquidity risk disclosures.

2025 TJA—Second Round of Assessments: The 2025 TJA evaluated Australia, Bermuda, Italy, Singapore, South Africa, and Spain—jurisdictions that collectively act as group-wide supervisors for 10 IAIGs. This assessment was narrower than the 2022 TJA, focusing only on the implementation of insurance core principles (ICPs) and ComFrame material related to (1) IAIG determination and macroprudential supervision, (2) liquidity risk management and disclosure, and (3) recovery planning and resolution frameworks. The IAIS observed the highest levels of implementation in IAIG determination, macroprudential supervision, and recovery planning, but found noticeable gaps in resolution planning, resolution powers, and liquidity risk management. Some key assessment details:

• On IAIG determination and macroprudential supervision: As with the 2022 TJA, this is an area of strength for all jurisdictions. However, some gaps were observed related to lack of group-level analysis, shortcomings in assessing whether an insurer is systemically important, and inconsistent consideration of financial stability risks.
• On liquidity risk management and disclosure: The TJA found divergences in supervisory practices for assessing liquidity risk in local markets, lack of formalized processes, and lack of enforceable requirements for stress testing and contingency funding plans, among other things. Standards related to liquidity risk disclosure were least observed.
• On recovery planning and resolution frameworks: The report notes that recovery planning frameworks are well-developed (or still under development) in most jurisdictions, but some lack the legal authority to mandate recovery plans. Larger gaps are observed regarding resolution powers and planning, specifically related to (1) establishing resolution powers for IAIGs in areas such as creating bridge institutions or restructuring of liabilities; (2) development of resolution planning frameworks; and (3) management information systems for recovery and resolution purposes, which the reports states are underdeveloped in most jurisdictions.

In other IAIS news, the organization’s 2026 virtual Global Seminar appears solely focused on a Leadership Dialogue to discuss IAIS work and upcoming priorities. It is scheduled for July 7 from 7:00 – 8:30 a.m. ET. The meeting will include a Q&A session for stakeholders to engage directly with IAIS leadership. More information will be available closer to the meeting.

On March 24, the Financial Stability Board (FSB) published its 2025 Annual Report. The report primarily recaps key activity and work product from 2025. However, it does restate several 2026 focus areas, aligned with the FSB’s priorities released earlier this year, including:

• An upcoming report on private credit (expected in May) and new work on vulnerabilities assessments, which could include examining foreign exchange derivatives markets or private finance.
• Continued focus on nonbank financial institutions (NBFIs), including improving FSB vulnerabilities assessment methodologies, implementing its recommendations on money market funds and open-ended funds, and work related to leverage and OTC derivatives.
• New work on sound practices for AI adoption, use, and innovation by financial institutions.
• An assessment of member initiatives to determine whether follow-up work is needed to align modernization outcomes.
• Continued support of authorities’ efforts to enhance the operationalization of resolution tools and conduct a strategic review of FSB crisis preparedness activities.
• Phase two of the 15-year review of monitoring the implementation of the FSB’s post-GFC (great financial crisis) recommendations.

Privacy Updates

Representative Zoe Lofgren (CA-18) re-introduced the Online Privacy Act in the U.S. House of Representatives. The act would apply to persons who both (1) intentionally collect, process, or maintain personal information; and (2) send or receive such personal information over the internet or a similar communications network, and it would set a national baseline for how personal data can be collected, used, and shared, specifically containing provisions regarding: (i) developing the Digital Privacy Agency, a new federal agency to enforce users’ privacy rights and ensure companies follow the law; (ii) data access, correction, deletion, consent, and use rights; (iii) obligations for the use and collection of consumer data; and (iv) enforcement, including a private right of action. The act would not contain exemptions for entities or data covered by HIPAA or the Gramm-Leach-Bliley Act (GLBA) but would state that the act shall not be construed to “modify, limit or supersede the operation of any privacy or security provisions” in current laws, including HIPAA and the GLBA.

Oklahoma Governor Stitt signed SB 546 into law, enacting Oklahoma’s comprehensive privacy law and officially making Oklahoma the 21st state to enact a comprehensive consumer privacy law. The law is set to go into effect in 2027. The final version of the bill includes exemptions for (1) financial institutions and data covered by Title V of the GLBA, and (2) covered entities and business associates subject to HIPAA privacy, security, and breach notification requirements.