NAIC Updates
Registration is open for the NAIC International Insurance Forum on May 7–8, 2026, in Washington, D.C. The preliminary agenda includes sessions on financial industry transformation, financial stability and innovation, cybersecurity, and operational resilience, as well as conversations with International Association of Insurance Supervisors (IAIS) leadership and the Global Asia Insurance Partnership. This event typically sells out, so we encourage members to register soon if they plan to attend.
In other NAIC news:
Life Insurance and Annuities Illustrations Working Group: The Life Insurance and Annuities Illustrations Working Group held its inaugural meeting on February 24. Ben Slutsker (Chair, MN) explained that the working group has a singular charge—looking at illustration and disclosure issues broadly. Previous groups (such as the Life and Annuity Illustration Subgroup) had an actuarial focus (if the group touches on actuarial issues, there will be close coordination with the Life Actuarial Task Force).
Slutsker announced the working group’s first project: examining indexed annuity sales materials and disclosures. A small group of states informally requested illustrations from the top 25–30 annuity market leaders, and a preliminary review revealed that some carriers are illustrating returns as high as 10–25% per year, with a third showing returns above 16%. This has raised concerns among regulators about whether this is leading to unreasonable consumer expectations. Slutsker said the highest illustrated rates observed have been from fixed indexed annuities, primarily due to back-casting (projecting future returns based on a hypothetical index’s past performance).
Life insurance illustrations, in comparison, are showing 5–8% returns on average, which Slutsker attributed to the widely adopted life insurance illustrations model and recent work on AG 49, whereas only 10 states have adopted the Annuity Disclosure Model Regulation (#245). He referred to Model #245’s provision that restricts the use of indices in existence less than 10 years, which he flagged for the working group. Both consumer representatives and working group members acknowledged the complexity of the documents, which are often difficult for consumers to understand.
Slutsker issued a 30-day Chair exposure requesting high-level feedback on short- and long-term approaches to ensuring consumers have reasonable expectations for indexed annuity returns at the point of sale. Comments are due March 24. This is expected to be a large undertaking by the working group; Slutsker encouraged stakeholders to provide their perspectives and ideas. The group’s next call will be scheduled following the Spring National Meeting to discuss comments.
Life RBC Working Group: On February 23, the American Academy of Actuaries unveiled its draft field test specifications to the Life RBC Working Group, along with a list of six foundational questions for working group members and stakeholders to consider (as a reminder, the C-3 alignment project seeks to harmonize C-3 Phase I with C-3 Phase 2 in light of VM-22 and the new Generator of Economic Scenarios (GOES)). The introductory questions cover topics such as discounting method, scalars, metrics, voluntary reserves, and granularity. The initial specifications propose covering all products currently subject to C-3 Phase 1, which includes single premium life and annuity products. Equity-linked annuities (e.g., fixed indexed annuities) will be included for field testing and will be added to C-3 Phase 1 upon completion of this project.
The Academy is contemplating a Summer Field Test, with confidential regulator-only sessions beginning in October. NAIC staff will then communicate high-level observations and themes raised by participants on drivers of results at a future working group meeting. The specifications contain several mandatory and optional sensitivities—some of which will help inform stakeholders’ responses to the questions included in the exposure. The specifications were exposed for a 45-day comment period ending April 13 and will be discussed again following the Spring National Meeting. The working group also exposed a few editorial changes to LR027 (Interest Rate Risk and Market Risk), with comments due March 27.
Third-Party Data and Models Working Group: The Third-Party Data and Models Working Group met on February 26 to discuss the proposed regulatory framework for third-party vendors, which drew near-unanimous criticism. Jason Lapham (Chair, CO) summarized the written comments, which he said highlighted major flaws and called for substantial revisions. Key concerns included opposition to a registration requirement, doubts about regulators’ legal authority over vendors, and questions about confidentiality and trade secret protections. Trade associations echoed these concerns, while consumer advocates expressed support for the effort. Lapham emphasized that this was only a first draft and pledged revisions, some of which may be significant.
Life Actuarial Task Force: The Life Actuarial Task Force (LATF) adopted APF 2025-12, which clarifies expectations surrounding the VM-22 Standard Projection Amount (SPA) disclosures and credibility. If an Additional SPA (ASPA) is indicated and the company is not strengthening its reserves in response to the SPA result, the company needs to provide support that the material drivers of the difference are due to company assumptions that can be supported based on reliable, relevant, and credible company data. The task force did not incorporate either of the changes proposed by the ACLI.
Most of the task force’s recent meeting was spent discussing Compact Filing Information Notice (FIN) 2025-2, which provides clarifications regarding non-forfeiture requirements following LATF’s adoption of a related drafting note. Industry raised concerns that the FIN applied more broadly than the drafting note and potentially impacted existing policies. LATF has held two regulator-only sessions on this topic since the last meeting. The Compact plans to issue a revised FIN, which removes any application to variable universal life (VUL) business and clarifies that the FIN is not intended to impact in-force contracts. Meanwhile, Rachel Hemphill (Chair, TX) exposed a question regarding whether a drafting group should be established to clarify non-forfeiture requirements for the amortization of the unused initial expense allowance for VUL and indexed universal life products.
Market Analysis Procedures Working Group: After reviewing its 2026 charges, the Market Analysis Procedures (D) Working Group (MAPWG) discussed the 2025 recommendation from the Market Analysis Prioritization Tool (MAPT) Ad Hoc group that a third party be engaged to review the MAPT technology, a recommendation that will be brought to the Market Regulation and Consumer Affairs (D) Committee at the Spring National Meeting. Raymond Guzman (Vice Chair, MD) provided an update from the Market Conduct Annual Statement (MCAS) Blanks Working Group call on February 5, in which the group discussed ratios and rankings and proposed updates (with no new data elements) for LTC, Health, Private Passenger Auto (PPA), and Homeowners. Following the MCAS work, MAPWG will next focus on the Homeowners and PPA blanks, with others considered at a later meeting. Guzman will circulate the ratios, rankings, history, and further context for regulator-only review before any ratio change suggestions are made.
Longevity Risk Subgroup: The Longevity Risk Subgroup decided to re-expose the Academy’s proposed approach for the C-2 treatment of longevity risk reinsurance, with a proposed floor (as suggested by Rachel Hemphill (TX)). The subgroup exposed the revised recommendation for a 35-day exposure ending March 27.
Staff Contact - Sean McKennaUK Regulators Release 2026 Priorities
Over the past two months, two UK regulators—the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA)—have published their regulatory and supervisory priorities for 2026. Both groups purport to aim to strengthen the safety, soundness, and competitiveness of the UK insurance market; address emerging risks; drive innovation; and ensure high standards in consumer protection and governance. Highlights of each group’s priorities are listed below:
PRA’s Insurance Supervision Priorities
- Funded Reinsurance: Monitor and address risks arising from increased use of funded reinsurance, including risk underestimation and regulatory arbitrage, with ongoing regulatory engagement and possible further restrictions. An update is expected in the second quarter of 2026.
- Investment Strategies & Illiquid Assets: Oversee firms’ evolving investment strategies, including greater use of structured and synthetic investments and private credit assets, requiring robust liquidity and credit risk management and enhanced reporting, leveraging both the PRA’s new liquidity reporting requirements and the Bank of England’s systemwide exploratory scenario.
- Group Supervision: Emphasize the critical role of Boards in ensuring robust, independent governance for legal entities within wider group structures, and require active management of potential conflicts of interest to uphold supervisory standards.
- Pension Risk Transfer: Engage actively with firms to ensure competitive pressures in the Bulk Purchase Annuity Market are not incentivizing firms to weaken pricing discipline or risk management standards.
- Underwriting Discipline & Reserving: Increase oversight of relevant firms showing the most material differences in actual and assumed profitability in their internal models to identify overly optimistic assumptions about future underwriting performance, and consider further supervisory action where necessary to ensure solvency capital requirements are not materially understated.
- Artificial Intelligence: Support growth, innovation, and competitiveness through adopting AI and related technologies, while protecting against novel risks such as reliance on third-party providers, cyber threats, and inaccurate data to ensure that AI adoption does not compromise safety and soundness.
- Operational Resilience: Require firms to embed operational resilience, address legacy technology, and prepare for new requirements including Solvent Exit Planning.
- Artificial Intelligence: Support growth and innovation through exploration and adoption of AI, encourage firms to test ideas in the FCA AI Lab, monitor outcomes for consumers, assess how firms use AI in insurance, and identify barriers to safe adoption, with an evaluation report expected by year-end.
- Simplifying Regulation: Continue efforts to simplify insurance rules and reporting requirements, removing some product-specific rules and streamlining data requests, with the goal of balancing regulatory burden and consumer protection.
- Consumer Duty: Ensure compliance with the Consumer Duty (a standard of care that firms owe consumers), where it applies, while also holding a consultation and review for disapplying the Consumer Duty to non-UK business.
- Captive Insurance Regime: Launch a consultation, together with the PRA, on a new regulatory framework for captive insurers, aiming to support growth and competitiveness in the UK market.
Privacy Updates
New amendments to the California Consumer Privacy Act (CCPA) were introduced. AB 2021 would support whistleblowers by creating an award program to incentive individuals to speak up about potential violations and establishing anti-retaliation provisions to protect whistleblowers. CalPrivacy has publicly sponsored the bill.
CalPrivacy released its 2025 Annual Report, which covers the implementation of the Delete Request and Opt-Out Platform, recent regulations for the CCPA, and the passage of the California Opt Me Out Act. It also provides updates from CalPrivacy’s divisions, including legal and enforcement.
New York introduced a health information privacy bill. S 9269 would apply to any entity that controls the processing of regulated health information of an individual who (1) is a New York resident, (2) is physically present in New York, or (3) is seeking or receiving services in New York if the entity is located in New York.
Staff Contact - Sean McKenna