January 9, 2026 Global Bankers Insurance Group (North Carolina)

Assumption Reinsurance Transactions Close

On December 15, 2025, NOLHGA and the state life and health insurance guaranty associations closed Assumption Reinsurance Agreements with Continental General Insurance Company (CGIC), under which CGIC assumed virtually all the guaranty associations’ remaining obligations related to Bankers Life Insurance Company (BLIC) and Colorado Bankers Life Insurance Company (CBL). The transactions were effective January 1, 2026.

BLIC and CBL were placed into liquidation by order of the Wake County Superior Court of North Carolina on November 30, 2024. Following the liquidations, affected guaranty associations began providing coverage for BLIC and CBL policyholders in accordance with their respective guaranty association laws. During the period from November 30, 2024, to the effective date of the assumption transactions, guaranty associations processed and paid more than $1.4 billion in covered claims for BLIC and CBL policyholders.

Task Force Chair - John Colpean;   Staff Contact - Bill O'Sullivan

NOLHGA Moves to New Office

NOLHGA has a new address. Our office is now located at:

NOLHGA
11911 Freedom Drive, Suite 660
Reston, VA 20190

The office’s phone and fax numbers have not changed.

  Staff Contact - Sean McKenna

FSOC Annual Report Details New Working Groups, Policy Recommendations

The Financial Stability Oversight Council (FSOC) released its 2025 Annual Report in December 2025. The report opens with a letter from Treasury Secretary Bessent announcing three new FSOC working groups: (1) the Market Resilience Working Group (MRWG), which will focus on Treasury, short-term wholesale funding, equity, and credit markets; (2) the Household Resilience Working Group, which will focus on American households’ financial condition; and (3) the AI Working Group, which will explore risks and opportunities associated with the adoption of AI.

The Annual Report asserts that U.S. financial markets are well-functioning, but changes in financial regulation, innovation and technology, and the current risk landscape present financial stability risks. The report outlines a handful of developments that warrant monitoring, including structural shifts and increased interconnectedness in the life insurance sector as well as availability and affordability challenges in the property and casualty insurance sector. FSOC acknowledged the state-based system of insurance regulation and expressed support for state regulators’ efforts to monitor insurance developments/trends and any associated financial stability implications.

FSOC’s four key areas of focus and their relevant accompanying policy recommendations are as follows:

• Bolstering Treasury Market Resilience: (1) Encourages members to use the MRWG to monitor resilience-boosting initiatives; and (2) recommends close monitoring of market developments, including the potential entry of new Treasury central counterparties and implementation of the GENIUS Act.
  
• Addressing Cyber Risk & Navigating an Evolving Threat Landscape: Encourages (1) continued monitoring and information sharing among regulators and industry, including the increased use of tabletop exercises; (2) continued coordination of third-party service provider examinations among banking regulators and expanded outreach to state regulators; and (3) passage of legislation by Congress to ensure the Federal Housing Finance Agency (FHFA) has adequate authority to manage risks associated with services provided by third parties to its regulated entities.
  
• Enhancing Supervisory & Regulatory Frameworks for Depository Institutions: Endorses recent actions by banking agencies regarding the holistic review of banking regulation and supervision, modernization proposals, and efforts to reduce compliance costs.
  
• Harnessing Artificial Intelligence to Promote Financial Stability: (1) Recommends member agencies use its AI Working Group to monitor potential financial stability risks posed by AI adoption within and outside the financial services sector; and (2) supports continued engagement with international counterparts regarding the use of AI in financial services.

  Staff Contact - Sean McKenna

NAIC Updates

On December 15, 2025, the American Academy of Actuaries provided a much-anticipated update to the RBC Investment Risk and Evaluation Working Group on its efforts to identify collateralized loan obligation (CLO) characteristics to assist in assigning risk designations (Comparable Attributes). The Academy is preparing its own model to test Comparable Attributes, which is largely consistent with the model used for corporate bonds. On the working group’s September call, the Academy identified a number of modeling decisions and judgment calls, and regulators requested additional information regarding the materiality of each of these decision points.

Steve Smith (the Academy) reported that each of the nine items has a material effect on outcomes and walked through the Academy’s recommended approach for each sensitivity. For several of the sensitivities, the Academy is proposing consistency with the corporate bond factors and maintaining the baseline assumptions from prior iterations of the model. Smith recognized that any material deviations from this path (likely in the name of improved precision) could result in a delay that calls into question the anticipated adoption timeline of year-end 2026.

Some of the sensitivities move in different directions, potentially offsetting one another to some extent. For example, including a repurchase discount and incorporating prepayments into the model would reduce the charge, whereas changing the recovery sensitivity could increase charges. In an ideal world, the Academy would want to sharpen its approach on these sensitivities, but any additional work could delay implementation. The Academy suggested that some of these refinements could be made after the Comparable Attribute work is adopted and applied. The current framework does not address residuals, but the Academy anticipates including residual information in its January update to the working group.

The working group also exposed a structural change to the Life RBC formula to incorporate the Academy’s work. Of course, no factors are included at this time. The Academy’s deck and the structural proposal were exposed for a 45-day comment period ending on January 29.

On behalf of the Academy, the Life RBC Working Group issued a survey in mid-December to gather initial feedback on a possible C-3 methodology field test, currently scheduled for Summer/Fall 2026. The survey will be used to inform key focus areas for the field test and the capacity for industry participants to be able to provide impact analysis of the different components under consideration. Responses are due by January 15.

The Blanks Working Group exposed the following items through February 6:

• 2025-21BWG, which revises the definition of Accepted Actuarial Designation based on the Actuarial Opinion Working Group’s assessment of educational materials of the Society of Actuaries and Casualty Actuarial Society.
  
• 2025-22BWG, which would amend the investment schedules to identify whether an investment is publicly registered, a Rule 144 investment, or a private placement security (or none of those). The item also adds a new part to Note 5 – Investments to report the total book/adjusted carrying value (BACV), fair value, total amount of aggregate deferred interest and PIK interest, and the total BACV supported by private letter ratings. See Ref #2025-19 coming out of the Statutory Accounting Principles Working Group (SAPWG).
  
• 2025-23BWG, which would update the Separate Account Assets page by adding “Nonadmitted Assets” and “Net Admitted General Account Assets” lines. This item also would add a new line on the Separate Account Summary of Operations to reflect a “Change in Nonadmitted Assets” within the surplus account. Finally, it would add an Exhibit of Nonadmitted Assets to the Separate Account Blanks. See SAPWG Ref #2025-25.
  
• 2025-24BWG, which would update Note 18B – ASC Plans to make clarifications related to Administrative Services Contracts. See SAPWG Ref #2025-30.
  
• 2025-25BWG, which would update Note 2 – Accounting Changes and Corrections by adding a reference to VM-20. See SAPWG Ref #2025-34.
  
• 2025-26BWG, which would update the annual statement expense categories and instructions to remove outdated terminology. See SAPWG Ref #2025-33.
  
• 2025-27BWG, which would add a section to the Life AVR to report CLOs. This item also would add a footnote to Schedule D, Part 1, to report the BACV of CLOs by NAIC Designation Category.
  
• 2025-28BWG, which would add two investment characteristic categories to clarify if an investment is owned by a qualifying statutory trust. This item also updates Schedule B instructions for reporting guidance for mortgages held in qualifying statutory trusts. See SAPWG Ref #2025-13.
  
• 2025-29BWG, which would add restricted asset codes to Investment Schedule General Instructions for assets subject to funds withheld and modco arrangements. See SAPWG Ref #2025-27.
  
• 2025-30BWG, which would provide clarification to Note 12 on how to complete fair value disclosures for retirement plan assets measured at net asset value. See SAPWG Ref #2025-21.

  Staff Contact - Sean McKenna

International Developments

The European Insurance and Occupational Pensions Authority (EIOPA) published its Financial Stability Report on December 15, 2025, highlighting a resilient but increasingly complex European insurance and pensions sector amid fragile macroeconomic conditions, elevated sovereign risks, and structural shifts in investment behavior. The report places particular emphasis on the rapid growth of insurers’ and pension funds’ private credit exposures, noting both the strategic appeal of illiquidity premium and liability matching benefits (especially for life insurers) and the accompanying vulnerabilities related to valuation uncertainty, liquidity risk, hidden leverage, concentration, and conflicts of interest, including higher illiquid asset exposures among private equity (PE) owned insurers.

The report also underscores the heightened interconnectedness between European insurers and global markets, with cross-border activities, dollar-denominated assets, and reinsurance linkages acting as potential channels for shock transmission. While overall solvency levels remain strong, the report cautions that capital relief under the Solvency II review, growing allocations to alternative assets, and opaque risk profiles could amplify firm-specific and systemic risks if not matched by enhanced transparency, supervisory scrutiny, and robust risk management. Against this backdrop, EIOPA signals intensified monitoring of investment flows, private credit concentrations, and group-level vulnerabilities, alongside continued focus on recovery and resolution preparedness under the Insurance Recovery and Resolution Directive (IRRD) and emerging risks such as cyber- and AI-driven systemic effects. Notably, in her introductory comments, Petra Hielkema (Chair, EIOPA) specifically states, “Ideally, a minimum set of harmonized rules on Insurance Guarantee Schemes would complement [the IRRD], pursuing the same objectives.”

EIOPA also announced a public workshop on February 4 to receive stakeholder feedback on the EU’s request for technical support and advice from EIOPA on the suitability of establishing minimum common standards for insurance guarantee schemes. Registration is available here.

EIOPA also published its third set of consultations related to the implementation of the EU’s IRRD. The package includes several draft Guidelines and Regulatory Technical Standards (RTS) documents, listed below. Comments are due March 20, 2026.

• Guidelines to specify further the range of scenarios in pre-emptive recovery planning: proposes a range of macroeconomic and financial stress scenarios (systemwide and insurance-specific) to assess the credibility and feasibility of insurers’ preemptive recovery plans.
  
• Guidelines to specify further the qualitative and quantitative indicators in pre-emptive recovery planning: specifies the qualitative and quantitative indicators to be considered in preemptive recovery plans, including capital, liquidity, asset quality, profitability, market conditions, macroeconomic conditions, and operational events.
  
• Guidelines to specify how information should be provided in summary or collective form for the purposes of Article 66(2) of the IRRD: includes guidelines related to the disclosure of confidential information made in summary or collective form.
  
• Guidelines to specify further details on the criteria on simplified obligations under the IRRD: outlines eligibility criteria to determine whether simplified obligations can apply for certain insurance/reinsurance undertakings and groups, including nature of business, shareholding structure, legal form, risk profile, size, legal status, interconnectedness, and scope and complexity of activities.
  
• RTS on the independence of valuers for resolution under Article 24(6) of the IRRD: specifies the conditions under which a valuer (independent valuation expert used during a crisis or resolution) is deemed to be independent from both the resolution authority and the entity under resolution.
  
• RTS on contractual recognition of resolution stay powers under Article 52 of the IRRD: proposes standardized terms for financial contracts that would allow the resolution authority to exercise its stay powers over contracts governed by third-country law.
  
• RTS specifying methodologies and principles on the valuation of liabilities arising from derivatives: specifies methodologies and principles for the valuation of liabilities arising from derivatives in the resolution process.

On December 11, the International Association of Insurance Supervisors (IAIS) held a short public background session on the insurance capital standard (ICS) related ComFrame standards, out for public consultation until February 5, 2026. The consultation revises the language of CF 9.4 (supervisory reporting) and CF 20.10 (public disclosure) and defines the purpose and scope of the ICS Implementation Assessment Methodology. Notably, CF 20.10 requires public disclosure of certain ICS information, which is garnering a lot of attention, particularly in the United States. Despite these concerns, there was little engagement from attendees during the Q&A, with only one question concerning the confidentiality of the Targeted Jurisdictional Assessments that will be done in 2027 to monitor implementation of the ICS.

The Financial Stability Board (FSB) published its Global Monitoring Report on Nonbank Financial Intermediation 2025 on December 16, providing a comprehensive assessment of global nonbank financial intermediation (NBFI) trends through the end of 2024 and highlighting areas of continued supervisory focus relevant to insurers and insurance groups. The report finds that the NBFI sector continued to expand faster than the banking sector, reaching roughly half of global financial assets, with growth concentrated in investment funds and other financial intermediaries, while vulnerabilities in the FSB’s “narrow measure” of NBFI (activities with bank-like risk characteristics) also increased.

From a financial-stability perspective, the FSB emphasizes leverage, liquidity and maturity transformation, wholesale funding reliance, and interconnectedness with banks as key channels through which stress could be amplified, citing past market episodes as evidence. Of particular relevance to the insurance sector, the report flags persistent data gaps and opacity around private credit and other private finance activities; notes growing interlinkages between insurers, funds, and other nonbanks (including through group structures and cross-border activity); and underscores supervisory attention to valuation practices, risk transfer, and potential spillovers across the financial system. Overall, the report signals sustained international regulatory scrutiny of NBFI—including insurance-related activities where they intersect with private credit, securitization, and group-wide risk—rather than immediate new policy measures, but with clear implications for globally active and PE-affiliated insurers operating across borders.

AI Activity

On December 11, 2025, President Trump signed an executive order declaring, “It is the policy of the United States to sustain and enhance the United States’ global AI dominance through a minimally burdensome national policy framework for AI.” The order also directs the Department of Justice to challenge state AI laws that are inconsistent with such policy.

In response, the NAIC released a statement urging the administration “to reconsider this Executive Order and, at a minimum, affirm state regulation of AI in the business of insurance to avoid damaging uncertainty.” NCOIL released a statement that said, “We believe the Executive Order is not the final word on this and that the Administration will likely be hearing from the Judicial system on this questionable Order.”

In other news, on December 16, the New York State Assembly Standing Committee on Insurance and Standing Committee on Science and Technology held a joint public hearing on the Use of Artificial Intelligence in Insurance Underwriting and Pricing. Witnesses included Acting New York Department of Financial Services Superintendent Kaitlin Asrow, Cassandra Anderson (New York Insurance Association), Dave Snyder (American Property Casualty Insurance Association), Sean McLaughlin (National Association of Mutual Insurance Companies), Chuck Bell (Consumer Reports), and Laura Evangelista (Life Insurance Council of New York). Lawmakers asked about the potential impact of AI on insurance pricing, underwriting, claims determinations, insurance company costs, and employment. They also expressed concern about human oversight, algorithmic pricing, third-party data, and the risks of discrimination.

  Staff Contact - Sean McKenna

Privacy Updates

CalPrivacy issued Enforcement Advisory No. 2025-01, addressing data broker registration requirements related to trade names, websites, and parent or subsidiary relationships. The advisory highlights that data brokers must disclose all trade names and website addresses through which they provide services and emphasizes that data brokers must register independently, rather than relying on a parent company or affiliated entity’s registration.

An Illinois state appeals court affirmed a lower court’s finding that Section 20(b) of the Illinois Genetic Information Privacy Act applies solely to health insurance companies. Section 20(b), codified at 410 ILCS 513/20(b), prohibits insurers from using or disclosing “protected health information” that is “genetic information” (as defined by HIPAA) for underwriting purposes. The opinion comes from an appeal of the lower court’s dismissal of the plaintiff’s claim that a life insurance company violated Section 20(b) by using genetic information for underwriting. On appeal, the court found that the language of Section 20(b) does not apply broadly to all insurers and, after finding that Section 20(b) was intended to bring Illinois law in line with HIPAA on the subject, specifically stated that “[i]f section 20(b) exists to harmonize Illinois law with federal law and the comparable federal regulation unambiguously does not apply to life insurers, then absent clear language to the contrary, we can only conclude that section 20(b) likewise does not apply to life insurers. To find otherwise would be to rewrite the law.”

  Staff Contact - Sean McKenna

California GA Seeks Outside Legal Counsel

The California Life & Health Insurance Guarantee Association (CLHIGA) is seeking an experienced California-barred attorney or firm to serve as outside counsel. The ideal candidate will have expertise in insurance regulation, insurer insolvencies (rehabilitations and liquidations), and guaranty association operations.

Interested parties should contact CLHIGA Executive Director Todd Thakar at [email protected] for the Outside Legal Counsel RFP package.

  Staff Contact - Sean McKenna