New Jersey GA Seeks Executive Director

The New Jersey Life & Health Insurance Guaranty Association (NJLHIGA) is seeking candidates for its Executive Director position. 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].

Federal Updates

During the June 4, 2026, House Financial Services Committee prudential oversight hearing, Reps. Vargas (D-CA) and Torres (D-NY) pressed Federal Reserve Vice Chair for Supervision Michelle Bowman on the banking system’s growing exposure to private credit and non-bank financial institutions (NBFIs). Bowman acknowledged that the private credit market remains “quite opaque” and confirmed that the Fed has limited visibility into where bank funding ultimately flows within the NBFI space. She reported that the Fed launched a new data collection initiative in May to close this gap and noted that Basel III capital reforms are designed, in part, to draw lending activity back into the regulated banking system, where it can be more effectively supervised.

Using private credit exposure to the software industry as an example, Rep. Torres argued that risks stem more from sector concentration—particularly in industries facing technological disruption—than from the asset class itself and asked whether policymakers should focus on private vs. public markets or on concentration vs. diversification. Bowman responded that underwriting quality is the key consideration and explained that loans to industries more vulnerable to shocks or competitive erosion should be structured to reflect those risks.

In other news, on June 3, the House Energy & Commerce Committee held a hearing on H.R. 8413, the SECURE Data Act, which would establish a federal comprehensive privacy and data security framework. Four witnesses testified on the bill’s merits and shortcomings, and committee members engaged in substantive discussion regarding the Act’s scope, sufficiency, and preemptive effect on existing state privacy protections.

Three of the four witnesses—Tyler Bridegan (Womble Bond Dickinson), Kate Goodloe (Business Software Alliance), and Ashli Watts (Kentucky Chamber of Commerce)—expressed support for the Act, emphasizing the need for a uniform federal standard that provides consistent obligations for businesses and equal privacy rights for consumers without hindering innovation. Caitriona Fitzgerald (Electronic Privacy Information Center) argued that the Act’s protections are weaker than many existing state laws and the committee’s own prior bipartisan agreements, citing insufficient data minimization requirements; the absence of a private right of action; numerous loopholes; and expansive preemption language that could undermine established state privacy protections, including protections against robocalls, wiretapping, and children’s privacy violations.

Committee members were similarly divided. Chairman Guthrie (R-KY) and other Republican members endorsed the bill as appropriately balanced, cautioning against overly restrictive requirements akin to the EU’s General Data Protection Regulation (GDPR). Ranking Member Schakowsky (D-IL) and other Democratic members countered that the Act favors corporate interests over individual protections and raised concerns about insufficient bipartisan input during its development. Key discussion topics included the influence of corporate interests on the bill’s drafting, the adequacy of data minimization and disclosure provisions, informed consent mechanisms, the scope of federal preemption, consumer opt-in versus opt-out rights, and the path toward bipartisan consensus. There was no explicit discussion of the guaranty association exemption, but there was some discussion about exemptions generally.

After the June 1 deadline for submitting comments to the Department of Labor’s (DOL’s) proposed rule for alternative assets in 401(k)s, the public comments totaled over 47,000. Some suggested minor revisions but supported the overall rule in potentially reducing litigation, while other parties argued that the proposed rule would weaken ERISA’s high standards for fiduciary duties. The ranking members of Senate HELP, Senate Banking, and House Education and Welfare Committees weighed in with detailed concerns on the risks and fees associated with alternative assets, the state of the market for the asset classes, the legality of the rule under ERISA and legal precedent, and conflicts of interest.

NAIC Updates

On June 1, 2026, the NAIC’s officers sent a letter of support to the bipartisan lead sponsors of the PARTNERS Act (H.R. 8726). The legislation, introduced by U.S. Representatives Troy Downing (R-MT) and Lloyd Doggett (D-TX) in May, would allow states to enforce Medicare Advantage organization (MAO) requirements and direct CMS to coordinate enforcement with both the state in which the MAO is licensed and any state in which the MAO issues Medicare Advantage plans. The House bill does not have a Senate companion currently. While the chances of enactment are slim, the legislation would effectuate a key legislative priority of the NAIC.

In other NAIC news, the Aggregation Method Implementation Working Group (AMIWG) met on June 2 to review feedback and proposed revisions to the draft Review of the U.S. Group Solvency System. AMIWG intended to finalize the draft on its next call (June 11) for submission to the International Insurance Relations (G) Committee. The G Committee will consider the draft during the Summer National Meeting and refer any non-Aggregation Method–related recommendations, such as those related to the group capital calculation (GCC) and own risk and solvency assessment (ORSA), to the Financial Condition (E) Committee.

On the call, Ned Tyrrell (NAIC) walked through the resolution of comments, with discussion primarily focused on Sections 3.2 (Consideration of the Comparability Assessment) and 6 (Reporting and Disclosure Requirements).

Section 3.2 Discussion

Identified Gap & Proposed Recommendations: The working group identified a gap arising from different regimes’ approaches to reserve conservatism, which can produce inconsistencies in aggregated capital. To address this, the draft proposes updating the GCC template with a functionality to scale to other regimes—this would enable regulators to translate capital ratios into a “common language” and observe differences from both domestic and international perspectives. Two options were presented:

• Option 1 (the original recommendation) would essentially function as a sensitivity test, producing an additional group ratio within the summary section of the GCC template.
• Option 2 (the alternative suggestion) would add local average capital levels of the scaled results for each entity to the scaling tab so regulators could perform their own analysis without producing a group-level result.

According to Tyrrell, both options would require no additional data submission from companies and would rely on an automatic calculation using the same inputs as the current GCC.

Industry Concerns: Mariana Gomez-Vock (ACLI) objected strongly to the overall approach. The ACLI views both options as effectively converting the U.S. Aggregation Method (AM) ratio to a foreign standard, which the ACLI considers problematic after years of advocacy to establish the AM as comparable. Gomez-Vock questioned why the United States alone would be subject to such a conversion and raised concerns surrounding the risk of confusion (especially if public reporting is contemplated), the appropriateness of applying scalars validated for a different purpose to an already scaled result, and the broader political signal this approach sends about the perceived adequacy of the U.S. framework.

Regulator Perspectives: Kevin Clark (IA) agreed the approach could be useful for facilitating cross-jurisdictional conversations and suggested that industry may be misunderstanding the recommendation. Anthony Quandt (NE) questioned group-level utility, suggesting the entity-level approach would be more straightforward, but viewed the tool as more interesting than useful for regulators. Dave Wolf (NJ) similarly stated that the analysis could be helpful for discussion at the International Association of Insurance Supervisors (IAIS) but may not be useful domestically. John Rehagen (MO) views this as a tool for use at the supervisory college level among group-wide supervisors, with no reporting to the IAIS.

Anticipated Follow-up Discussion: Tyrrell explained that the completed GCC template does not go to the IAIS, is not public, and no individual group or company would be identified. He emphasized that the value lies in addressing a perception issue at the IAIS: U.S. conservatism is reflected in reserves rather than capital requirements, producing higher ratios that can be misinterpreted as indicating weaker supervisory intervention, and a translation tool would help counter that narrative. The ACLI requested a numerical example of both options so industry and regulators can fully evaluate the proposal and its output. Rebecca Easland (Chair, WI) directed staff to prepare an example spreadsheet showing how each option would appear in the GCC template, which the group planned to discuss during its June 11 call.

Section 6 Discussion

Proposed Recommendation: While Section 6 received the highest volume of comments, there was limited discussion on the call because the NAIC has not prepared a true recommendation. Easland reported that the working group will wait for the IAIS to publish the final ComFrame reporting and public disclosure requirements and then convene a forum to discuss options for the U.S. framework. The working group intends to rely on entity-level reporting where possible and to leverage existing regulatory tools rather than creating new reporting obligations.

Industry Feedback: The ACLI emphasized that because the AM is implemented through the GCC, and the GCC is subject to significant confidentiality protections, any change to those protections would constitute a significant policy change. The ACLI further stated that such a change warrants scrutiny and discussion at the commissioner level and urged that policy changes reflect U.S. interests and needs rather than being driven at the direction of a global body.

On June 2, Ben Slutsker (Chair, MN) reminded attendees of the Life Insurance and Annuities Illustrations Working Group’s recent decision to reopen the Annuity Disclosure Model Regulation (#245) for revisions. Before the working group can begin revising the model, approval is needed from both the Life Insurance and Annuities Committee and the Executive Committee. In the meantime, the working group has begun reviewing interested party recommendations for potential model updates and discussing short-term solution mechanisms. The discussion resulted in the exposure of two items until July 17: a summary list of potential Model #245 modifications and a flow chart that anticipates development of a new Actuarial Guideline (AG) for use as a stopgap mechanism until states adopt a revised model. For both items, commenters are encouraged to suggest alternatives for aspects they do not support. Here are additional details from the working group’s discussion:

Proposed Modifications to Model #245: The list of recommended modifications, drawn from comment letters, spanned several categories—illustration length, illustrated rate, disclosures, and accountability.

• The bulk of the discussion focused on how illustrated rates should be presented, including whether to rely on historical performance, standardized crediting rates, or alternative methods like scenario-based tables. Differences emerged regarding the intended role of illustrations (as educational tools or sales tools), with concerns that current practices may incentivize inflated projections.
• Participants broadly supported shortening illustration length to improve usability and reduce consumer confusion. Suggestions included aligning illustrations with surrender charge periods, reducing redundancy, and consolidating ledger presentations.
• The working group discussed simplifying disclosures while maintaining key consumer protections, with proposals such as eliminating projections, standardizing language, and clearly distinguishing guaranteed versus non-guaranteed elements. Participants debated the appropriate level of redundancy with other tools like the annuity buyer’s guide, with general agreement that selective duplication of critical information at the point of sale could benefit consumers.
• There was a suggestion to introduce a formal accountability role such as an illustration actuary, responsible for certifying or overseeing disclosures, noting parallels to existing life insurance practices.

Stopgap Approach (AG Concept): Donna Megregian (American Academy of Actuaries) emphasized that the viability of an AG hinges on clearly defining the actuarial role and responsibility. She noted that there must be “some level of accountability” tied to the actuary; otherwise, the rationale for using an AG becomes questionable. She suggested that if the working group proceeds with an AG, it must be tightly integrated with defined actuarial responsibilities and accountability mechanisms. This perspective aligned with broader concerns raised by the ACLI and Insured Retirement Institute (IRI)—both suggested that the AG would act more as a policymaking tool than a guideline and suggested it would be more appropriate to consider other options.

The Big Data and Artificial Intelligence Working Group met on June 1 to discuss updates on the AI Systems Evaluation Tool Pilot and hear a panel presentation on AI governance trends.

Update on the AI Systems Evaluation Tool Pilot: Coral Manning (WI) provided an update on the status of the AI Systems Evaluation Tool pilot. Participating states have largely identified and notified companies that will receive inquiries under the pilot, despite varying timelines. Regulators are coordinating through weekly collaboration and training efforts, and Manning reported that states have found the tool effective and adaptable across a range of AI use cases and companies so far. That said, early feedback highlighted the need to refine some elements of the tool to provide clarity and consistency in language, particularly regarding the use of “AI Program,” “Governance Program,” and “materiality.” The working group outlined a work plan for the remainder of the year (see slide 8 of the materials), with the goal of adopting a revised version of the tool in November.

Panel Discussion on AI Governance Trends: The discussion underscored that both regulators and industry are still adapting to rapidly evolving technologies, with flexibility and iteration central to future governance approaches. Here are some notable takeaways:

• Panelists observed strong developments in insurer governance practices, including implementation of formal governance structures with senior oversight, strong data governance, cross-functional coordination, and ongoing monitoring of models for bias and performance risks.
• Evolving definitions of AI, lack of national standards, and the increasing complexity of AI agents were cited as key challenges for regulators and companies.
• Panelists emphasized that effective oversight should focus on the use case, data quality, and potential consumer impact; one panelist encouraged the use of tiered approaches aligning scrutiny to risk.
• Human oversight continues to be a critical expectation, particularly for high-impact decisions, and panelists noted the importance of tracking the right metrics and key performance indicators to ensure that AI functions properly before and after operating independently.

On June 3, the Privacy Protections Working Group reviewed comments on Article VIII (Additional Provisions) of the chair’s draft revisions to the Privacy of Consumer Financial and Health Information Regulation (#672). Most of the discussion centered on Section 31 (Individual Remedies). Consumer representatives proposed adding language to clarify that the Act does not inadvertently eliminate existing rights. Director Dwyer (Chair, RI) explained that this has been expressed in other NAIC models, and the working group ultimately agreed to replace the existing language in Section 31 with the following from the Insurance Data Security Model Law (#668): “This Act may not be construed to create or imply a private cause of action for violation of its provisions nor may it be construed to curtail a private cause of action which would otherwise exist in the absence of this Act.” Dwyer also announced that a comprehensive draft incorporating these and previously discussed revisions is in progress and will be exposed as soon as possible to allow sufficient time for review before it’s discussed at the NAIC Summer National Meeting.

AI Activity

On June 2, 2026, President Trump signed an executive order (Promoting Advanced Artificial Intelligence Innovation and Security) in response to cybersecurity concerns raised by Anthropic’s Mythos model. The order directs administration officials to prioritize the cyber defense of national security, military, and critical infrastructure systems. It calls for the establishment of an AI cybersecurity clearinghouse that would coordinate identification and remediation of software vulnerabilities. Most notably, it calls for the establishment of a voluntary framework for developers of frontier AI models. Under the framework, developers would have the opportunity (but not the obligation) to provide the federal government with prerelease access to frontier models and collaborate with the government on the selection of trusted partners who would get early access to the models. The hope is that early access would give trusted partners the chance to strengthen their cybersecurity before frontier models become publicly available.

On June 4, Representatives Jay Obernolte (R-CA) and Lori Trahan (D-MA) released a bipartisan discussion draft of the “Great American Artificial Intelligence Act of 2026.” The draft bill would preempt state and local laws that specifically regulate the development of artificial intelligence models. It would expressly preserve state laws of general applicability, common law remedies, and any state law governing post-deployment activities such as the implementation, deployment, distribution, offering, or use of AI systems, products, or services. The preemption would sunset after three years unless reauthorized by Congress.

International Developments

The International Association of Insurance Supervisors (IAIS) is advancing several important workstreams, including:

Recovery & Resolution: The Standards and Supervisory Practices Committee (SSC) has reviewed the revised Application Papers on recovery and resolution, which are expected to be finalized in the fourth quarter.

ICS Implementation

• The Implementation Assessment Committee met recently to discuss the insurance capital standard (ICS) implementation assessment methodology and the Baseline Self-Assessment questionnaire for the U.S. implementation of the ICS.
• The SSC is considering publication of an ICS Q&A on Credit Rating Agencies and reviewing public consultation comments on the draft ICS-related ComFrame standards on supervisory reporting and public disclosure.

Asset-Intensive Reinsurance & Alternative Assets

• The SSC recently approved a high-level outline of a draft Application Paper on asset-intensive reinsurance.
• The Macroprudential Supervision Working Group (MSWG) received member updates on supervisory practices regarding asset-intensive reinsurance, alternative assets, and interconnectedness.

Risk Monitoring

• The Macroprudential Monitoring Working Group (MMWG) is making enhancements to the risk dashboard on financial markets and considering a statistical annex for future Global Insurance Market Reports (GIMARs).
• The MSWG and MMWG convened a joint meeting last month to receive presentations from Australian regulators, industry, and academics on various topics, including risk management and private markets.

On June 4, life insurance industry and regulators (including Ohio Director French (Co-Chair, IAIS SSC) and Prudential Regulation Authority (PRA) Director Vicky White) gathered in London for the Second Annual InsuranceERM Global Life Reinsurance conference. Key takeaways included:

Funded Reinsurance Under Regulatory Pressure

• PRA Consultation: The PRA is seeking to moderate FundedRe growth by addressing inconsistent capital treatment between FundedRe assets and economically equivalent directly held assets.
• No Hard Limits: The PRA is not proposing a ban or cap but is putting the onus on firms to make transaction design choices that curb the growth of FundedRe.
• Industry Impact: Panelists confirmed that regulatory uncertainty has already reduced FundedRe appetite and is creating bottlenecks in the transaction pipeline.
• Market Concentration: The proposals are expected to concentrate activity among stronger counterparties, but likely with unintended consequences.
• Cross-Border Spillover: The PRA’s stance will likely influence other regulators and may reflect a broader protectionist trend that makes UK firms less competitive internationally.
• Arbitrage Accusations: Bermuda-based participants rejected arbitrage characterizations, citing substantial recent regulatory developments and continued reaffirmation of Solvency II equivalence and NAIC reciprocity.

Regulatory Priorities Across Other Jurisdictions

• Bermuda (BMA): Flexible Oversight – The BMA does not regulate FundedRe as homogeneous, pointing to its regime’s flexibility to scrutinize individual transactions across multiple dimensions.
• Europe (EIOPA): Preventive Action – EIOPA acknowledges Solvency II does not adequately capture FundedRe risks and is preparing supervisory guidance for national authorities expected later this year.
• U.S. State Regulators (Ohio): The first round of AG 55 reports covers approximately 100 companies and $800 billion in reserves, with early patterns showing large groups of companies holding reserves that are either below statutory requirements or backed by assets of questionable quality that may not meet cash flow testing expectations. Key concerns of reviewers include speed of growth of annuity business, ceding to offshore affiliates, and inadequate counterparty creditworthiness evaluation.
• International (IAIS): Two application papers will follow the IAIS structural shifts Issues Paper: asset-intensive reinsurance by year-end 2026 and alternative assets by the end of 2027.

Private Equity & Alternative Capital in Insurance

• Benefits: Panelists highlighted private equity (PE) capital as permanent, patient, and long-term—well-suited to sticky insurance liabilities.
• Risks: PE capital is not always permanent, and the industry has not yet faced a credit cycle during the current FundedRe/PRT era, raising questions about how PE-backed capital will perform under stress.
• Governance Over Ownership: Panelists argued that ownership structure matters less than understanding underlying transactions, counterparty motivations, and risk alignment.
• Protection Gap Debate: The BMA characterized PE as “the only available bid” to close the protection gap; EIOPA disagreed, favoring a broader range of solutions.

Private Credit: Opportunities & Differentiation

• What Insurers Hold: Insurers focus on investment-grade private credit, distinct from the leveraged buyout lending featured in media coverage.
• Asset-Backed Financing: The trend is moving toward asset-backed financing as banks retreat from this space.
• Risk Management: Panelists stressed that private credit failures stem from controllable factors, such as hidden leverage, poor governance, and lack of transparency.
• Illiquidity Premium: The illiquidity premium is not “money for free”; investors are giving up valuable liquidity and must weigh that trade-off carefully.
• Regulatory Focus: The PRA’s stress test and systemwide exploratory scenario (SWES) are examining private credit; the NAIC is strengthening RBC and its capacity to challenge credit ratings.

Privacy Updates

The Vermont legislature passed an amended version of S. 71, the Vermont Data Privacy and Online Surveillance Act. The bill now awaits signature by Governor Scott. The bill was amended, among other items, to add definitions to key terms to align with the state’s Age-Appropriate Design Code Act, remove the private right of action provision, include nonprofits in the scope of the bill, and grant consumers the ability to question decisions rendered by automated decision-making technology systems. The amended bill retains exemptions for data and entities covered by HIPAA and data covered by Title V of the Gramm-Leach-Bliley Act (GLBA).

Louisiana Governor Landry signed the Louisiana Data Privacy Act (SB 386) into law, making Louisiana the 22nd state (and third this year) to enact a comprehensive consumer privacy law. The Act contains data and entity-level exemptions pursuant to HIPAA and Title V of the GLBA.

The California Privacy Protection Agency joined a coalition of 18 Attorneys General and state agencies in opposing the proposed federal data privacy act, the Securing and Establishing Consumer Uniform Rights and Enforcement over Data Act (SECURE Data Act). The coalition’s letter calls on Congress to reject the SECURE Data Act and to respect additional privacy protections states already grant their residents or would provide in future state-level legislation.