New Jersey GA Seeks Executive Director

The New Jersey Life & Health Insurance Guaranty Association (NJLHIGA) is seeking candidates for its Executive Director position. The NJLHIGA seeks an experienced leader with expertise in insurance products and regulation, financial analysis, insurer receiverships and insolvencies, and/or insurance guaranty association operations.

Interested parties should contact NJLHIGA Board Chair Rich Bowman via email at [email protected].

Missouri GA Seeks General Counsel

The Missouri Life & Health Insurance Guaranty Association and Missouri Property & Casualty Insurance Guaranty Association are seeking to obtain the services of an individual or law firm to serve as outside general counsel to one or both associations. The general counsel will serve as legal advisor to one or both associations and their Boards of Directors. The issues encountered range from statutory opinions, Board governance best practices, representing the association on national multi-state liquidations, employee liability issues, and representing the associations in litigation.

The general counsel is expected to monitor current, new, and pending state and federal legislation as well as case law as applicable to the associations. The general counsel should inform and provide direction to Board members and the Executive Director regarding compliance issues and any impact on the associations.

Any attorney designated to provide any portion of the services must be a member in good standing of the Missouri Bar. The selected individual or firm will report to and be managed by the Executive Director and Board Chairs from each association.

Interested parties should contact Executive Director Tamara Kopp ([email protected]) by July 31, 2026.

Sonderling Nominated as Secretary of Labor

As expected, President Trump has nominated Acting Department of Labor Secretary Keith Sonderling to serve as Secretary following Lori Chavez-DeRemer’s exit after misconduct allegations earlier this year. Sonderling previously served in both Trump administrations on the Equal Opportunity Employment Commission (EEOC) and as Deputy Secretary of the Department of Labor.

NAIC Updates

The Capital Adequacy Task Force held a call on June 30, 2026, working through a substantial agenda that included adoption of several proposals and significant discussion on the collateralized loan obligation (CLO) RBC factor proposal. The task force adopted the following items:

Proposal 2026-12-IRE MOD, the landmark proposal adopting the American Academy of Actuaries’ C-1 risk charges for CLOs, collateralized bond obligations (CBOs), and collateralized debt obligations (CDOs). The working group agreed to review certain decisions if new information is presented or guidance is received from the task force.

Indiana proposed an amendment committing the Academy to perform additional analysis on middle-market (MM) CLOs, including validation, review of key sensitivity drivers, and tranche-level calibration as the immediate next phase of the structured products roadmap. Philip Barlow (Chair, DC) acknowledged MM CLOs will be on the working group’s future topics list but stated it is premature to commit to next steps before the working group reviews all options and priorities. No other states supported the Indiana amendment.

Proposal 2026-09-L MOD, which updates the Life RBC formula to account for enhanced granularity in Schedule BA reporting for collateral loans. The changes integrate more detailed classifications directly into LR008, Line 51 (Schedule BA Collateral Loans) annual statement source references.

Proposal 2026-10-CA, which incorporates changes to the Annual Statement Source for collateral loans, residual tranches or interests, and tax credit investments on pages XR008, PR008, and PR009 for both the health and P&C formulas, reflecting the adoption of 2024-19BWG Modified by the Blanks Working Group. The changes are consistent with those adopted for life, with no asset valuation reserve (AVR) changes and no interim solution related to mortgage loan collateral.

Proposal 2026-01-L, which updates the Life RBC formula AVR default equity and other invested asset component tables in the Life RBC formula to align with Blanks Working Group changes.

Proposal 2026-02-L, which would allow companies to use look-through treatment for unaffiliated Schedule BA Mortgages for unaffiliated residential mortgage loans in good standing. Recall that the working group has already afforded this treatment for affiliated Schedule BA Mortgages for residential mortgages—including a risk charge of 0.0068.

Proposal 2025-16-L MOD, which adopts the current treatment of collateral loans. Currently, all collateral loans except those backed by mortgage loans receive a flat risk charge of 6.8. This workstream was designed to incorporate look-through treatment for all non-mortgage collateral loans. The working group adopted “Option 2” without the ACLI’s proposed changes, resulting in a tiered treatment based on the collateral loan’s loan-to-value (LTV) ratio (with a 50% haircut floor). This change will not take effect until 2027 reporting.

The task force also re-exposed its proposed 2027 Charges for 14 days after incorporating a few of the ACLI’s proposed revisions.

Finally, Steve Drutz (WA) reminded attendees of the Health RBC Working Group’s efforts to update the health underwriting risk charges (noting potential for significant increases effective year-end 2027). The next working group call is July 15; all interested parties are encouraged to attend.

International Developments

The Bank for International Settlements (BIS) announced a new strategic plan in its 2025/26 Annual Report (“BIS 100: Building resilience, strengthening connections”) to guide the organization through 2030—its 100^th anniversary. The strategy consolidates the BIS’s focus on price stability and a resilient financial system while building closer ties among central banks. One of its four focus areas is “focused economic and policy insights,” involving deepened analysis of monetary and financial stability issues, expanded data collection, and improved accessibility of statistics.

The BIS also released its flagship Annual Economic Report, warning that financial stability risks are building outside the banking sector. Key takeaways include:

• NBFIs & the “fiscal-financial stability nexus”: The report identifies leveraged, funding-dependent non-bank financial institutions (NBFIs) as central to a nexus that can spread and intensify strain rapidly—moving through short-term funding channels, across borders, and between banks and nonbanks.
• Private credit growth & stress: The report warns that tightening credit conditions could expose vulnerabilities in the private credit space, whose reach has expanded among middle-market and smaller firms. It points to early signs of stress, with retail-oriented direct lending funds facing rising redemptions and being forced to sell assets and return capital. Concentration risk is rising, with direct lending funds having quadrupled their exposure to AI and technology borrowers over the past five years on terms that may signal weaker credit discipline.
• Interconnectedness & cross-border spillovers: The BIS warns that a larger shock could trigger a broader credit crunch extending into the banking system, given banks’ growing exposure to private credit funds and insurers’ overlapping holdings.
• Regulatory response & data gaps: The report urges “congruent regulation,” holding intermediaries posing similar risks to comparable standards regardless of legal form, through measures such as minimum collateral discounts in securities financing, stricter cash buffers for open-ended funds, and wider use of central clearing. The BIS also stresses closing data gaps on NBFI leverage, bank-NBFI interconnectedness, and private credit exposures.

In other international news, Gerry Cross started as International Association of Insurance Supervisors (IAIS) Secretary General on June 15, replacing Jonathan Dixon. In a recent interview, Cross identified three key challenges for insurance supervisors globally: (1) heightened geopolitical uncertainty and cross-border vulnerabilities; (2) AI risks through cyberattacks, algorithmic bias, and systemic model failures; and (3) liquidity, valuation, and counterparty risk concerns associated with structural shifts in the life insurance sector (noting the importance of providing clear guidance in this area).

Activity at the IAIS is picking up as we head into the second half of the year. On July 7, IAIS leadership provided updates on its work program and upcoming priorities during the virtual Global Seminar Leadership Dialogue.

The IAIS Executive Committee recently approved:

• The final Application Papers on Recovery Planning and Resolution Powers, Preparation and Plans: Given the mid-year approval, it’s likely we will see these papers published in the third quarter, presumably within the next few weeks.
• The 2026 mid-year Global Insurance Market Report: This report is typically published in late June or early July, so we also expect to see this published very soon.

The systemic risk assessment of structural shifts in the life insurance sector is underway. The Standards and Supervisory Practices Committee is also working on the draft Application Paper on asset-intensive reinsurance. An update on this workstream is expected during the July 7 Global Seminar.

Registration and additional details for the Annual Conference—scheduled for November 12–13 in Hong Kong—are expected in mid-July.