NAIC Updates
On May 27, 2026, the Life Insurance and Annuities Illustrations Working Group (LIAIWG) discussed feedback on a short-term solution to address regulatory concerns regarding high illustrated annuity returns, ultimately deciding to use the Annuity Disclosure Model Regulation (#245) language as a starting point. The working group still needs to discuss the scope of requirements to be addressed and an interim approach for states that have yet to adopt the model, which were expected to be covered during a call on June 2. Key discussion points include:
Interested Party Comments: The American Academy of Actuaries, ACLI, Committee of Annuity Insurers, CANNEX Research, Insured Retirement Institute, Life Insurance Consumer Advocacy Center, and Scott Stolz submitted comments, which revealed some common themes:
- A shared goal of ensuring illustrations explain how products work rather than projecting hypothetical performance
- Broad support for Model #245 as a workable foundation
- Calls to simplify and shorten illustrations, including ideas such as reducing the duration of the illustration period and creating more summary-based documents
Proposed Development of a New Actuarial Guideline: The working group discussed a potential parallel-track approach to address the low adoption of Model #245: revising Model #245 while simultaneously developing a new Actuarial Guideline (AG) that would apply as a stopgap in states without Model #245. In states that already have a version of Model #245, the model takes precedence, and those states would adopt the revised version. Dan Schelp (NAIC Legal) explained that the new AG would derive authority from both Model #245 and the Suitability in Annuity Transactions Model Regulation (#275) (which contains language supplementing the disclosure requirements in Model #245) and would have general application under the Accounting Practices and Procedures Manual.
Regulator Perspectives: Overall, regulators agreed that starting with Model #245 would be more practical than starting from scratch. Mike Yanacheak (IA) emphasized that an AG based on Model #245 represents the quickest path to national impact, and Josh Blakely (OR) described the AG as an “elegant solution” to bridge the gap while encouraging uniform adoption of the Model. Tomasz Serbinowski (UT) supported starting with Model #245 but opposed the AG development, noting this is not an actuarial issue. Matt Cheung (IL) questioned whether Model #245 would need to retain its current scope if revised, sparking a discussion about whether registered index-linked annuities (RILAs) should be addressed in the working group’s efforts.
Next Steps: The working group will seek A Committee approval to formally reopen Model #245 for revisions. In the meantime, during the June 2 call the working group planned to discuss and expose (1) concepts for potential updates to the Model derived in part from interested party comment letters, including whether to scope in RILAs; and (2) the AG (or alternative) stopgap mechanism.
In other NAIC news, the Receivership Law Working Group (RLWG) received an update on the legal uncertainty surrounding Medicare Secondary Payer issues and the consequences of the current environment, including delayed distributions, increased claw back risk, hesitancy to close estates, and higher administrative costs. Presenters walked through the current jurisdictional split on whether P&C guaranty associations constitute a “primary plan” under the Medicare Secondary Payer Act, which would trigger Section 111 reporting or reimbursement obligations. Several potential resolutions were discussed, including federal legislation; increased coordination amongst guaranty funds, receivers, and CMS; and potential updates to the Receiver’s Handbook. Laura Slaymaker (Chair, PA) suggested establishing a drafting group to assist with changes to the Receiver’s Handbook. Parties interested in participating should reach out to Jane Koenigsman at the NAIC.
The Blanks Working Group took the following actions on its call last week:
Adopted the following previously exposed or deferred items:
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2025-23BWG (Modified), which updates the Separate Account Assets page by adding “Nonadmitted Assets” and “Net Admitted General Account Assets” lines. This item also adds a new line on the Separate Account Summary of Operations to reflect a “Change in Nonadmitted Assets” within the surplus account. Finally, it adds an Exhibit of Nonadmitted Assets to the Separate Account Blanks. See SAPWG Ref #2025-25. This item will be effective for annual 2027 reporting.
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2025-24BWG, which updates Note 18B – ASC Plans to make clarifications related to Administrative Services Contracts. See SAPWG Ref #2025-30.
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2025-25BWG, which updates Note 2 – Accounting Changes and Corrections by adding a reference to VM-20 and a reference to phased-in reserve changes related to the prescribed economic scenario generator. See SAPWG Ref #2025-34.
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2025-26BWG (Modified), which updates the annual statement expense categories and instructions to remove outdated terminology. See SAPWG Ref #2025-33.
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2025-27BWG (Modified), which adds a section to the Life AVR to report collateralized loan obligations (CLOs). This item also adds a footnote to Schedule D, Part 1 to report the book-adjusted carrying value (BACV) of CLOs by NAIC Designation Category. The revisions expand these reporting obligations to collateralized bond obligations (CBOs) and collateralized debt obligations (CDOs).
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2026-01BWG, which adds instructions to Note 26 – Intercompany Pooling Arrangements for modifications to an existing intercompany pooling arrangement that involves the transfer of assets with fair value that differ from statement value.
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2026-02BWG (Modified), which updates Note 11 – Debt to add a cross-check between Note 11B – FHLB Agreements and General Interrogatory #26.
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2026-03BWG (Modified), which updates various elements of the Life annual and quarterly blanks to clarify how companies should report valuation standards for VM-22 business. This item also adds an annual supplement for VM-22 reserve reporting.
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2026-04BWG (Modified), which adds a section to Note 11 – Debt to disclose funding agreements backing special purpose vehicle (SPV) issuances (FABNs). This item also adds a footnote to Exhibit 7 in the Life blanks to report the amount of total funding agreements backed by SPV issuances. This item stems from the Financial Stability Task Force’s and Macroprudential Working Group’s funding agreement and FABN educational efforts last year.
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2026-05BWG, which updates blanks instructions to explicitly require identification of instances where the Net Asset Value (NAV) method is utilized. This item requires the inclusion of NAV information in the Fair Value Hierarchy Level and Method Used to Obtain Fair Value Code columns to provide a single, consistent location for this information.
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2026-06BWG, which updates Note 5L(1) – Restricted Assets to add a reconciling adjustment to identify the assets pledged under multiple arrangements.
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2026-07BWG, which incorporates clarifying revisions to the blanks instructions for completing certain investment reporting columns (payment due at maturity, origination balloon payment, and Schedule BA maturity date). It also limits the reporting scope for the payment due at maturity on both Schedule D-1-1 and Schedule D-1-2.
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2026-08BWG (Modified), which updates Schedule T in the Annual Statement to add an “O – Other” active status code for reporting entities with unique, restricted license types that do not fit existing categories.
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2026-09BWG, which adds a line to the Five-Year Historical Data section to capture short-term and cash equivalent affiliated investments.
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2026-11BWG, which updates Note 5A – Mortgage Loans by adding a paragraph to disclose mortgage loans acquired through a qualifying investment in a qualifying statutory trust.
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2026-12BWG, which updates the AVR factors to zero in columns 7 and 9 for the Collateral Loan section. This item is sponsored by the Life Risk-Based Capital Working Group.
Deferred action on the following items:
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2025-29BWG, which would add restricted asset codes to Investment Schedule General Instructions for assets subject to funds withheld and modco arrangements. As discussed on SAPWG’s May 18 call, regulators continue to discuss the value of the CUSIP-by-CUSIP restricted asset designation in the investment schedules.
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2026-10BWG, which would update Life/Fraternal Liability lines 24.03 and 24.07 to add a reference to use the BACV and an annual crosscheck to Schedule S.
Exposed the following new items:
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2026-13BWG, which would add an active status code column to the Cybersecurity Insurance Coverage Supplement Part 5.
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2026-15BWG, which would update the “CUSIP” column throughout the annual and quarterly investment schedules to be a “Security Identifier” column to allow for different types of identifiers (CUSIP, CINS, PPN, ISIN, and LXID) and add a Security ID Type column to identify the security identifier being used. This item stems from a referral from the Invested Assets Task Force.
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2026-16BWG, which would update the list of disclosure exclusions for Note 20C – Fair Value Measurements to remove investments accounted for under the equity method.
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2026-17BWG, which would update Annual General Interrogatory 25.04 and 25.05, changing “amount of collateral” to “assets lent,” and update Note 5L(1) category “Collateral held under security lending agreements” to “Assets lent under security lending agreements.”
Comments on all deferred and exposed items are due July 27. The working group also adopted its editorial listing and received a referral memorandum from the Invested Assets Task Force regarding combining security identifiers and adding a Security Identifier Type field to the financial statements.
During a May 27 call of the Long-Term Care Actuarial Working Group, Fred Andersen (Chair, MN) reviewed findings from the joint American Academy of Actuaries and Society of Actuaries study, which led to the exposure of updated mortality and lapse valuation tables for new standalone LTC insurance policies until July 13. These tables, located in Appendix 3 of the study, are intended to replace those currently in VM-25 for policies issued after the adoption date. Once feedback is reviewed, the group will consider updates to VM-25 based on the study’s results. Andersen also noted that the Senior Issues Task Force will continue discussing policy matters related to hybrid LTC products, while the working group will focus on pricing and educational needs. An upcoming call with a subject matter expert will kick off this effort, providing an overview of hybrid products and pricing, followed by additional sessions as needed.
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