Massachusetts GA Seeks Executive Director

The Massachusetts Life & Health Insurance Guaranty Association (MLHGA) is seeking candidates for its Executive Director position. The current Executive Director, Bill Fisher, will be retiring effective December 31, 2026, following a long and distinguished tenure with the association.

MLHGA is seeking an experienced leader with expertise in insurance products and regulation, insurer insolvencies, and/or guaranty association operations. The preferred start date for the selected candidate is September 2026.

Interested parties should contact MLHGA Board Chair John Deitelbaum at [email protected].

Book Your Rooms Now for the July Legal Seminar

The NOLHGA room block at the InterContinental Chicago Magnificent Mile, host hotel for the 2026 Legal Seminar, is filling up, so we encourage you to book your rooms now.

As a reminder, the Legal Seminar will be held on July 30–31, with an MPC meeting on July 29. The MPC meeting will be broadcast using Zoom, but Legal Seminar attendance is in-person only. Registration for the meetings is:

• Legal Seminar: $950
• Legal Seminar and/or MPC Meeting Guest: $125 (includes entry into all social events—receptions, lunches, etc.)
• Member MPC Meeting: No fee (for GA Board Members, Administrators & Staff)
• Non-Member MPC Meeting: $299

If you have any difficulties booking a room at the hotel (especially if you are booking a room on July 27 for the State GA Board Chairs Conference), please contact De Gadd at [email protected]. If you have any questions about the Legal Seminar or MPC meeting, please contact Sean McKenna at [email protected].

Federal Updates

On May 7, 2026, Treasury Secretary Scott Bessent convened a meeting with insurance regulators and the NAIC to discuss recent developments and regulatory responses regarding private credit and offshore reinsurance. The Treasury Department and regulators agreed to further engagement on NAIC initiatives related to risk-based capital (RBC), private letter ratings, offshore reinsurance/jurisdictions, and oversight of evolving business models. Commissioners Houdek (WI), Godfread (ND), Ommen (IA), Ochs (NJ), Pike (UT), Yaworsky (FL), Humphreys (PA), Schmidt (KS), Kuderer (WA), and Directors Deiter (SD), Dwyer (RI), and Cameron (ID) were among the regulators attending.

NAIC Updates

In a two-hour call of the RBC Investment Risk and Evaluation Working Group, regulators heard stakeholder feedback on the American Academy of Actuaries’ proposed factors for collateralized loan obligation (CLO) debt tranches. The Academy has proposed two options to drive RBC charges as an alternative to individual CLO modeling: (1) use of ratings only; or (2) use of ratings and tranche thickness (increasing the charges for Baa3 tranches and below with a thickness of lower than 4%). All the Academy’s analysis to date has been on BSL CLOs, and questions remain regarding the treatment of Middle Market (MM) CLOs. Commenters varied greatly on the best path forward, ranging from a disclosure-only approach for 2026 to adoption of Option 2 for both BSL and MM CLOs.

Iowa and Virginia were the only two regulators who submitted comment letters, with both supporting the application of changes to all CLOs for year-end 2026 reporting. Iowa supports Option 1, with additional 2027 refinements to tranche thickness. Iowa suggested that ratings alone may not be reliable predictors of risk, depending on whether a rating agency incorporates loss given default into its methodology, and indicated that issue could be addressed by the Credit Rating Provider Working Group. Virginia supports Option 2, with additional refinements to the Academy model’s underlying assumptions and additional work on MM CLOs.

Additional takeaways from the call:

• CLO Structure Adopted: The working group adopted structural changes that allow for flexibility to incorporate either Academy option. The changes also allow for application to MM CLOs.
• CLO Charges Exposed: Both Options for CLO debt tranche factors were exposed for a 30-day comment period ending June 5.
• Residual Tranche Exposure: At the outset of this week’s call, the Academy outlined certain adjustments to its residual tranche analysis. Despite the methodology changes, the Academy continues to recommend retaining the current factor for residuals (45% pre-tax; 35.55% post-tax). Comments on the residual approach are due July 6.
• Additional Work on PAF: The working group ran out of time for the Academy to provide its update on the Portfolio Adjustment Factor (PAF). The working group will schedule a follow-up call to hear this update. In the meantime, the Academy’s PAF slides are exposed alongside the residual tranche deck, with comments due July 6.
• Referral to CRP Working Group Forthcoming: As noted above, certain distinctions amongst rating agency methodologies were identified during these efforts. Carrie Mears and Kevin Clark (IA) will prepare a referral to the Credit Rating Provider Working Group to engage in additional analysis to determine whether refinements should be made to the CLO framework as a result. Note that given the timing, any such changes likely will be for 2027 or later.

In other NAIC news, on May 4, 2026, the Credit Rating Provider (CRP) Working Group heard a presentation on PricewaterhouseCoopers’ (PwC) proposed CRP Due Diligence Framework, which is exposed until July 3. To better inform comment letters, interested parties can submit questions to the working group through June 3. The draft framework intends to establish a process for NAIC oversight of CRP ratings applied to Filing-Exempt (FE) and Private Letter (PL) securities. Its objectives are to (1) corroborate the reasonableness and equivalency of CRP ratings as translated into NAIC Designations; (2) reduce “blind reliance” on CRP ratings; (3) focus due diligence on areas with the highest risk or solvency impact through a risk-based, proportionate approach; and (4) ensure that inconsistencies are identified, assessed, and remediated through a structured and governed process. Here is a high-level overview of the framework’s main components:

• Scoping Assessment: The scoping assessment is the initial phase that defines the scope and focus of the due diligence activities through preliminary screening and quantitative/qualitative assessments. This stage identifies areas of potential risk or divergence across CRPs, asset classes, and individual securities that warrant deeper review. Insurer exposure, growth, data sufficiency, spread analysis, and historical rating changes are among the factors considered when determining which CRP/asset class intersections (or “scoping segments”) move forward for further risk analysis. Essentially, the scoping efforts establish where the NAIC should spend its time.
• Risk Assessment: Through quantitative testing and analytical procedures, this component produces risk classification results that highlight patterns, inconsistencies, or areas of concern in CRP ratings, forming the analytical foundation for more granular investigation. Test segments are classified as high, moderate, or low risk, guiding the nature and extent of subsequent detailed testing. The assessment is designed to be iterative and scalable.
• Detailed Testing Procedures: The detailed testing procedures include methodology walkthroughs and discussions with CRPs, as well as security-specific independent rating analysis and methodology review. Not every difference will be perceived as problematic; the NAIC will be looking for more systemic concerns. A key feature of the security-specific rating review is the application of the NAIC’s three sub-notch materiality threshold; if the deviation between the NAIC’s independent rating and the CRP rating exceeds the materiality tolerance, it will be flagged for escalation and potential remediation.
• Governance Procedures: The governance structure ensures ongoing review and maintenance of the framework. The CRP Working Group has primary responsibility for implementation and operation, supported by NAIC staff; the Invested Assets Task Force (IATF) will serve in a review, challenge, and approval role. The framework contemplates that the CRP Working Group will produce an annual report for the IATF that summarizes findings, trends, and recommendations. Any recommended remediation action—which could include enhanced monitoring, requiring an additional PL rating, removal of FE status for an asset class, or even CRP de-admittance—would require consideration by the IATF, Financial Condition Committee, and Plenary.

Once the framework is approved, each historically accepted CRP will receive provisional acceptance for up to 36 months. During this provisional period, NAIC staff will walk through each CRP’s methodologies, focused on FE and PL asset classes.

The Financial Stability Task Force has scheduled a call for June 15 to receive a presentation from S&P on private credit. No additional details have been provided.

The Life Actuarial Task Force (LATF) exposed two items on its call last week—a memo outlining the company selection criteria for the group annuity mortality experience data collection and an APF clarifying reserving of variable annuities in a payout phase—both for a 21-day comment period ending May 27. Here are some additional details on each exposure:

• APF 2025-14: This proposal clarifies that variable annuities in the payout phase, either after annuitization or account value depletion, can be reserved for as a variable annuity under VM-21 with notice to (and non-disapproval by) the domiciliary regulator. If reserved for under VM-21, the Standard Projection Amount requirements apply to these contracts. These changes were previously exposed by the Variable Annuity Capital and Reserves Subgroup. The ACLI submitted a comment letter during that exposure period, which resulted in additional changes to clarify the discount rates to use for variable annuities in the payout phase that are reserved for as payout annuities.
• Group Annuity Mortality Experience Data Collection—Company Selection Memo: This memo sets forth the process NAIC staff and regulators have taken to identify the initial list of companies to participate in the group annuity data collection approved by LATF in April. Currently, 36 companies have been identified for inclusion on this initial list, but companies will be able to seek an exemption under the criteria laid out in VM-51. Note that companies scoped into the collection likely will be notified by the end of June. Comments are due May 28.

The Aggregation Method Implementation Working Group scheduled two calls regarding the draft US Group Solvency Regulation Review (exposed until May 11). The working group will meet on June 2 to discuss comments and potential refinements and on June 11 to finalize and consider the draft for adoption.

International Updates

On May 5, 2026, the European Insurance and Occupational Pensions Authority (EIOPA) launched a consultation on technical advice relating to the potential harmonization of Insurance Guarantee Schemes (IGSs) across the European Union. The consultation reflects EIOPA’s continued focus on reducing differences in policyholder protection among EU Member States, particularly in cross-border insurer failures, where national approaches to guaranty mechanisms currently vary significantly in scope, coverage, funding, and operational structure. The consultation seeks stakeholder input on four broad areas: the impact of minimum harmonized IGS frameworks, operational functioning of IGSs, funding considerations, and the interaction between harmonized IGSs and the EU’s Insurance Recovery and Resolution Directive (IRRD). Comments are due June 26.

On May 6, the Financial Stability Board (FSB) published its Report on Vulnerabilities in Private Credit, representing one of the most comprehensive international financial stability assessments to date of the rapidly expanding private credit market and its interconnections with banks, insurers, private equity firms, and asset managers. The report was informed by information collected from select FSB member jurisdictions (Canada, Europe, Hong Kong, Japan, South Africa, Switzerland, the United Kingdom, and the United States), international organizations (BCBS, the Bank for International Settlements (BIS), the International Monetary Fund (IMF), and the International Organization of Securities Commissions (IOSCO)), external research, and discussions with various market participants. While the report acknowledges the economic benefits of private credit—including expanded financing capacity, diversification of funding sources, and attractive long-duration investment opportunities—it also reflects growing concern among international policymakers regarding opacity, leverage, valuation practices, and interconnectedness across the broader private finance ecosystem. The report repeatedly emphasizes that private credit markets “remain untested” through a prolonged downturn at their current size and level of interconnectedness, a theme that underpins much of the FSB’s analysis.

The report is not framed as a call for immediate regulatory intervention; rather, it appears designed to establish a conceptual and supervisory foundation for future monitoring and policy development. Although the FSB formally defines “private credit” narrowly as “nonbank direct lending to medium-sized companies negotiated bilaterally,” the substance of the report adopts a much broader “ecosystem” perspective encompassing private credit funds, collateralized loan obligations (CLOs), synthetic risk transfer transactions, insurer investment activity, funded reinsurance structures, bank financing arrangements, and private equity ownership models. The report is particularly focused on the extent to which risks may become difficult to identify as leverage, funding dependencies, and exposures move across multiple interconnected institutions and structures. Consistent with broader recent work by the FSB, IMF, EIOPA, and the Bank of England, the report repeatedly highlights concerns relating to layered leverage; valuation opacity; refinancing dependence; liquidity mismatch; concentration; and “circles of risk” created through overlapping exposures among banks, insurers, private credit funds, and affiliated asset managers.

The insurance sector features prominently throughout the report. The FSB identifies insurers and pension funds as major investors in private credit markets due to the attractive illiquidity premium and long-duration characteristics of the assets, while also noting the increasing role of private equity–affiliated insurers and asset-intensive/funded reinsurance arrangements in facilitating private credit investment activity. The report does not suggest that such activity is inherently problematic; however, it reflects growing supervisory interest in how these structures may contribute to concentrations of risk, valuation uncertainty, and interconnected exposures that may be difficult to monitor on a system-wide basis. In particular, the discussion of private ratings, model-based valuations, infrequent marking practices, and insurer investment incentives strongly suggests increasing international supervisory focus on governance, transparency, and surveillance expectations surrounding private assets held by insurers and affiliated investment structures.

One of the most significant aspects of the report may ultimately be its focus on data collection, surveillance metrics, and supervisory coordination. The FSB explicitly notes that “some level of global harmonisation in the metrics used could be beneficial” and proposes a series of core monitoring metrics designed to improve authorities’ ability to assess leverage, interconnectedness, liquidity risk, refinancing dependence, valuation practices, and concentration exposures across the private credit ecosystem. This portion of the report appears especially significant because it may represent the early stages of a broader international monitoring framework for private credit–related activities. Similarly, the report’s concluding discussion of future workstreams—including further analysis of interlinkages across nonbanks, mapping and defining the ecosystem, facilitating supervisory discussions, and addressing data challenges—strongly suggests that international authorities view private credit as an increasingly systemically relevant area warranting deeper and more coordinated supervisory attention over time.