MPC Meets in Washington, D.C.
The Members’ Participation Council (MPC) held a meeting on July 23, 2025, in Washington, D.C., and online. In addition to the insolvency task force report below, the MPC General Session featured:
- Comments from NOLHGA Chair Joy Higa, who spoke about the importance of the educational sessions held during the meeting (see below) and the upcoming Legal Seminar.
- The MPC Chair Report, during which MPC Chair Amanda Barbera (Indiana) described the duties of the MPC Chair, in particular the need for the Chair to make sure the members have all the information they need and to encourage collaboration and communication among the members.
- The NOLHGA Management Report, in which NOLHGA President Katie Wade updated attendees on progress made in NOLHGA’s technology, systems, and documentation projects—including AssessConnect—and on the Education Project.
- A closed-session presentation by the Global Bankers Insurance Group (North Carolina) Task Force.
- A presentation on the work of the MPC Rules Drafting Group and its suggested revisions to the MPC Rules & Procedures. After discussion of the revisions and an amendment to them, the MPC voted down the amendment and passed a resolution to accept the revisions.
- A meeting of the MPC Executive Committee.
- A closed-session meeting of the Senior Health Insurance Company of Pennsylvania (SHIP) Task Force.
- A GA Administrators Tabletop exercise entitled Preparing for an Insolvency.
- Life Insurance 201, an educational session conducted by Robert Burke (Vermont), Phil Barlow (D.C. Department of Insurance, Securities & Banking), Amanda Hamala (USAA), and Joel Glover (Faegre Drinker).
Task Force Chair Bart Boles (Texas) outlined the details of a plan for the affected guaranty associations to make a final payment to Aurora to defease their remaining obligations under Articles 22 and 23 of the 1993 Enhancement Agreement to the original Liquidation Plan for ELIC. The ELIC MPC unanimously passed a resolution approving the proposed defeasance plan.
Task Force Chair – Bart Boles; Staff Contact - Bill O'SullivanAlaska Names New Acting Insurance Director
Heather Carpenter has replaced Lori Wing-Heier as Acting Director of Alaska’s Division of Insurance. Following this transition, Commissioner Sharon Clark (KY) has replaced Wing-Heier as Chair of the NAIC Financial Regulation Standards and Accreditation (F) Committee. Acting Director Carpenter joined Alaska’s Division of Insurance as a Deputy Director in June 2023.
Staff Contact - Sean McKennaNAIC Updates
On July 21, 2025, the NAIC’s Macroprudential Working Group heard presentations on funding agreement–backed notes (FABNs) from NAIC staff and the ACLI. Tim Nauheimer (NAIC) emphasized that current reporting prevents regulators from being able to quantify and monitor activity in the FABN market to identify transmission channels of potential risk and interconnectedness to the capital markets. The NAIC staff’s presentation identified four key risks—reporting/transparency, liquidity, asset-liability matching, and credit risk—along with mitigants for each specific risk. The NAIC noted that it does not believe that FABN activity poses an outsized risk for any particular insurer or the industry, recognizing a lack of complete information. The NAIC presentation concludes with seven questions for the industry, including whether the presentation accurately describes the current FABN market, how companies manage risks, whether the industry takes a position on additional FABN disclosures, and whether debt-to-equity ratio should include “debt-like” insurance liabilities.
The ACLI presentation walked through certain characteristics of FABNs and recent commentary from AM Best on FABN programs. Marc Altschull (ACLI) emphasized that funding agreements are generally recognized as contract holder obligations pari passu with other general account liabilities and are not debt. He also noted that the current FABNs generally consist of term-certain liability (with very predictable cash flows based on known terms, crediting rates, etc.) that are not exposed to policyholder behavior or other actuarial risks. The ACLI will work on responses to the NAIC’s specific questions; expect additional NAIC work in this area in the future.
At the upcoming Summer National Meeting, the International Insurance Relations (G) Committee will discuss the International Association of Insurance Supervisors’ (IAIS) Public consultation on the review of the GME Individual Insurer Monitoring assessment methodology, currently open for comment through August 18. The committee circulated its draft comments via email on July 23 and is requesting feedback by August 6.
The Life RBC Working Group and Variable Annuity Subgroup held a joint meeting on July 21 to discuss potential changes to the C-3 Phase 1 framework in response to a referral from the Generator of Economic Scenarios (GOES) Subgroup. The proposal implements the technical changes for the C-3 Phase I and Phase II update for the adoption of the GOES and updates the C-3 calculation to not rely on a deep tail conditional tail expectation (CTE) metric. The ACLI continues to urge regulators to take a deliberative approach with these changes and consider the impact of other NAIC workstreams, specifically the new GOES. The working group exposed three documents for comment: (1) the RBC proposal form; (2) the C-3 Phase I Changes; and (3) the C-3 Phase II Changes. Comments are due August 20, and regulators will follow up these changes with specific questions regarding the appropriate scalar and CTE level at a later date.
The Market Conduct Examination (MCE) Guidelines Working Group discussed its 2025 charges, including its fifth charge to coordinate with the Innovation, Cybersecurity, and Technology (H) Committee to develop MCE guidance for regulated entities’ use of algorithms and AI. The working group will continue working with H Committee and the Big Data and AI Working Group following the National Meeting discussions regarding the AI Systems Evaluation Tool and the possibility of an AI model law.
Staff Contact - Sean McKennaEIOPA Update
On July 22, 2025, the European Insurance and Occupational Pensions Authority (EIOPA) published two documents related to the implementation of the Insurance Recovery and Resolution Directive (IRRD): (1) draft Regulatory Technical Standards on the functioning of resolution colleges, which set the criteria for establishing resolution colleges and define how they operate; and (2) draft Implementing Technical Standards on procedures and templates for the provision of information for resolution plans that insurers should use when submitting plans to resolution authorities. Comments are due October 31.
Staff Contact - Sean McKennaAI Activity
On July 23, 2025, the White House released its AI Action Plan, which calls for total deregulation of AI at the federal level. The action plan also says that any state that regulates AI in an imprudent or overly burdensome manner will risk losing out on AI-related funding from the federal government. The action plan does not specify what would constitute imprudent or overly burdensome state regulation.
Staff Contact - Sean McKennaPrivacy Updates
The Texas Office of the Attorney General issued a statement detailing its efforts to protect Texans’ data privacy and security following the launch of the Attorney General’s data privacy and security initiative last year. Over the past year, as described, Attorney General Paxton’s Privacy and Tech Team investigated the data practices of over 200 companies and received over 2,000 privacy complaints through the team’s online complaint portal.
Senators Hawley (R-MO) and Blumenthal (D-CT) have introduced the AI Accountability and Personal Data Protection Act. The bill creates a federal tort for data misuse, allowing individuals to sue any person or company that appropriates, uses, sells, or exploits their personal data or copyrighted works without clear, affirmative consent. Additionally, the bill requires companies to clearly disclose every third party that will access an individual’s data at the time consent is sought. At this time, the bill does not contain any reference to, or express exemption for, insurance companies or other financial institutions.
Staff Contact - Sean McKenna