Gaines Named Nevada Acting Insurance Commissioner

Nevada Department of Business and Industry Director Dr. Kristopher Sanchez has announced the appointment of Ned Gaines as Acting Commissioner at the Nevada Division of Insurance, effective July 2, 2025. As Acting Commissioner, Gaines is charged with protecting consumer rights and the public’s interest in dealings with the insurance industry. Recruitment to fill the position on a permanent basis will be conducted.

Acting Commissioner Gaines has more than 25 years of experience in the insurance industry. He joined the Nevada Division of Insurance in April 2025 as the Chief Deputy Commissioner. Prior to this, he served 12 years with the Washington State Office of the Insurance Commissioner in a variety of leadership roles, most recently as the Deputy Commissioner of Rates, Forms & Provider Networks. Prior to that, he worked for several national property/casualty insurers as a compliance manager, claims manager, claims adjuster, and agent.

  Staff Contact - Sean McKenna

District Court Rules That Federal Law Preempts Provision of Colorado Liquidation Priority Statute

On June 27, 2025, the U.S. District Court for the District of Colorado ruled that federal law preempts a provision (Colo. Rev. Stat. § 10-3-541(1)(a)(II)) in Colorado’s insurance liquidation priority statute that prioritizes payments to insurers harmed by another insurer’s Affordable Care Act (ACA) Risk Adjustment Program default. In particular, the court held that both the Federal Priority Statute (31 U.S.C. § 3713) and Affordable Care Act (ACA) preempt the Colorado provision, for the following reasons:

• The provision violates the Federal Priority Statute by prioritizing private claims over the federal government. It does not qualify for a carveout under the McCarran-Ferguson Act and the Supreme Court’s decision in U.S. Dept. of Treasury v. Fabe (1993).
  
• The provision disrupts the ACA’s regulatory scheme, which requires pro rata distribution of risk adjustment payments, by allowing the commissioner as liquidator to pay one insurer directly, and in full, from the insolvent insurer’s estate.

  Staff Contact - Sean McKenna

NAIC Updates

On July 3, 2025, the RBC Model Governance Task Force released a request for comment on the preliminary risk-based capital (RBC) principles, including specific questions regarding the principles. The immediate priority is to provide options on proposed preliminary “top-of-the-house” RBC principles and life investments quantitative guidelines for regulators to choose—with a focus on more RBC precision in the area of asset risk. Notably, the request for comment also includes proposed preliminary RBC principles, with principles addressing the use of RBC calculations, objectivity, consistency with statutory accounting, emerging risks, RBC changes, and governance. Comments are due by close of business on July 24.

The Capital Adequacy Task Force made its way through a full agenda on June 30, taking the following actions:

• Adopted Item 2025-10-L, which implements the Statutory Accounting Principles Working Group’s (SAPWG) previous changes. It clarifies in the Life RBC Instructions that if any portion of a modco/funds withheld asset has been concurrently used as a pledged asset for a purpose specific to the ceding company (e.g., securities lending, repurchase, or FHLB transaction) at any time of the year, the RBC for the ceding company shall not be reduced.
  
• Adopted Proposal 2025-03-CA, which provides the annual update of the underwriting factors for Comprehensive Medical, Medicare Supplement, and Dental & Vision for the investment income adjustment in the health RBC formula.
  
• Adopted a revised RBC amendment procedure document. The revisions (1) clarify the difference between structural and non-structural changes; (2) provide for an annual update to the Capital Adequacy Task Force’s working agenda; and (3) update the timing for posting of materials on the NAIC website (from business days to calendar days).
  
• Adopted the 2026 proposed charges for the task force and its working groups. Note that charges for the RBC Investment Risk and Evaluation Working Group have been revised to include (1) facilitating coordination and alignment among NAIC committees/task forces/working groups related to its work in reviewing the current asset risk framework; and (2) evaluating relevant historical data and applying defined statistical safety levels over appropriate time horizons.
  
• Exposed a referral from SAPWG regarding Collateral Loan reporting changes.
  
• Received a letter from PineBridge Investments proposing that non-life insurers be allowed to apply the Securities Valuation Office (SVO) fund designation for RBC purposes for bond mutual funds and bond private funds. The letter also calls for applying bond-like RBC treatment to non-bond debt obligations that were reclassified as Schedule BA assets under the principles-based bond definition.

  Staff Contact - Sean McKenna

International Developments

Late last month, the U.S. Treasury Department and the European Commission co-chaired the EU-U.S. Joint Financial Regulatory Forum. U.S. representatives from Treasury, the Federal Reserve Board, Commodity Futures Trading Commission (CFTC), FDIC, Office of the Comptroller of the Currency (OCC), and SEC attended, along with European representatives from the European Commission, European Central Bank, European Banking Authority, European Securities and Markets Authority, European Insurance and Occupational Pensions Authority, and the Single Resolution Board. The Forum featured dialogue on market developments and financial stability, digital finance, banking and insurance, and capital markets (among other topics):

• On insurance, participants discussed (1) the role of private equity and asset managers in diversifying insurance portfolios; (2) recovery and resolution-related matters; and (3) reinsurance capacity for natural catastrophe coverage.
  
• Participants remain concerned about asset valuations, noting that they remain elevated relative to fundamentals across several asset classes.
  
• Participants emphasized the importance of (1) continued international dialogue to discuss comparable regulatory standards, monitoring vulnerabilities, and enhancing the resilience of the financial system; and (2) implementing robust prudential regulatory frameworks, supervisory practices, and effective macroprudential policies.
  
• Participants shared their views and updates on recent developments with respect to the use of artificial intelligence in financial services.
  
• EU representatives provided an update on their macroprudential review of non-bank financial institution (NBFI) policies.

In other news, the International Association of Insurance Supervisors (IAIS) Executive Committee has agreed on six High-Level Principles (HLPs) that will guide the development of the International Capital Standard (ICS) implementation assessment methodology (for use in the 2027 targeted jurisdictional assessments) and the self-assessment questionnaire (for use in the 2026 baseline self-assessments). HLP 6 specifically notes that the Aggregation Method (AM) is subject to the same assessment methodology as the ICS and will be complemented by a specific list of instructions (developed at the same time as the methodology) to guide the assessors in the implementation assessment of the AM.

Last week, the IAIS published its Draft Application Paper on operational resilience objectives and toolkit and the final Application Paper on the supervision of artificial intelligence. Both papers will be discussed during a public background session on July 17 at 7:00 a.m. ET (register here):

• Draft Operational Resilience Objectives & Toolkit: The draft Application Paper consists of operational resilience objectives, which are intended to provide supervisors with a high-level framework for supervising insurers’ operational resilience, and a toolkit of supporting practices and tools for use by supervisors to achieve the objectives. The objectives have been updated based on stakeholder feedback received during a previous consultation in August 2024. Comments are requested on both elements of the draft application paper (the updated objectives and the new toolkit) until September 29.
  
• Final AI Application Paper: The final Application Paper reflects updates informed by stakeholder feedback received earlier this year. The paper discusses how existing Insurance Core Principles related to governance and conduct apply to insurers and intermediaries that deploy AI systems and ways supervisors can manage associated risks. The resolution of comments details the specific changes to the paper, and it appears the IAIS has adopted the majority of suggestions offered by the NAIC.

In other IAIS news:

• In addition to the recently released documents above, the IAIS Executive Committee last month approved the final Application Paper on the fair treatment of diverse consumers, which should be published soon.
  
• The Macroprudential Committee has begun discussing feedback received on the draft Issues Paper on structural shifts in the life insurance sector and updates to the Financial Stability Board (FSB) on its upcoming review of the Holistic Framework.
  
• The Policy Development Committee is in the preliminary stages of developing a draft Application Paper on the availability of capital.

  Staff Contact - Sean McKenna

California Privacy Updates

The California State Assembly’s Committee on Public Safety voted to advance SB 690, which amends the California Invasion of Privacy Act to clarify that it does not apply to website tracking, a practice in which insurance agencies commonly engage. SB 690 is a two-year bill, allowing it to carry into the 2026 legislative session for additional consideration.

California Attorney General Bonta announced a $1.55 million settlement with website publisher Healthline Media LLC regarding allegations that Healthline’s use of online tracking technology on its health information website violated the California Consumer Privacy Act (CCPA). The complaint alleged that Healthline violated the CCPA by (1) failing to allow consumers to opt out of the sharing of their personal information for targeted advertising; (2) violating the purpose limitation principle by sharing article titles suggesting a consumer may have already been diagnosed with a specific medical condition; (3) failing to maintain CCPA-required contracts; and (4) deceiving consumers about privacy practices. In addition to the fine, the settlement requires Healthline to (1) ensure that its opt-out mechanisms work correctly; (2) stop disclosing information that can link a specific consumer to a specific article title that suggests the consumer has been diagnosed with a disease; (3) maintain a CCPA compliance program; and (4) maintain accurate online disclosures and a privacy policy.

  Staff Contact - Sean McKenna