September saw the continuation of different NAIC group activities. Many of the meetings were held by groups that did not meet during the NAIC Summer National Meeting, while other discussions were a continuance from that meeting.
Risk-Based Capital (RBC) Investment Risk & Evaluation Working Group – September 8, 2025
After adopting its meeting minutes from June 23, 2025, the group’s attention then turned to an update from the American Academy of Actuaries (Academy) on its structured securities RBC project. The presentation was very detailed but allowed regulators the opportunity to ask questions to provide more clarity. Regulators were very engaged during the presentation, which is not always the case in some NAIC meetings. The next step will be to schedule another call to provide more detail for some of the questions asked by the regulators. The chair also announced that as currently planned, the Working Group will not be meeting at the next NAIC National Meeting in December.
Statutory Accounting Principles Working Group (SAPWG) – September 10, 2025
This meeting was an educational session dedicated to asset-liability management (ALM) derivatives. The American Council of Life Insurers (ACLI), on behalf of industry, provided the Working Group with a presentation that included some history of ALMs as well as two different possible accounting approaches; the amortized cost method and the mark-and-spread method. During and after the presentation, Working Group members asked several questions and/or provided comments. SAPWG then exposed the material for comment through October 31, 2025. The exposure contains both proposed accounting methods with the group looking for feedback and preferences on both methodologies. Once the exposure period ends, SAPWG will review the comments, decide which approach to put in place, and consider any suggested revisions before further action is taken.
Life Risk-Based Capital (RBC) Working Group – September 11, 2025
The Working Group did not meet during the NAIC Summer National Meeting in August, but this meeting continues its work toward revisions to the 2026 (and beyond) Life RBC formula. The Academy provided a brief presentation entitled “C-3 Alignment, Part III.” This presentation was a culmination of previous work and asks for some specific feedback from the Working Group. Included were an outline of the current C-3 framework recommendations, areas where further analysis was suggested, and framework elements recommended for implementation. The Academy then asked for feedback on these issues for use in future field testing and model office analysis. After some detailed discussion, the Academy indicated it felt it had the needed feedback to continue with its work. Attention then turned to reference item 2025-13-L, which proposes changes to the covariance calculation. At a previous meeting, questions arose concerning the proposal, resulting in the Working Group asking the Academy to provide responses to those questions. At this meeting, the Academy provided a formal response to those questions. The Working Group then exposed the previous presentation slide deck for comment through November 10, 2025. The chair announced the Working Group would not be meeting at the upcoming NAIC Fall National Meeting in December.
Health RBC Working Group – September 29, 2025
Most of this meeting was dedicated to a discussion on the comments received regarding the Academy’s work on new reporting and factors for the H-2 Underwriting Risk Component and Managed Care Credit Calculation. The current proposal would add additional products lines to the RBC reporting, which will require a new reporting format for the H-2 Component. Three comment letters were discussed in which industry expressed some concerns over specific recommendations. Industry also expressed concern over how these changes could affect the market. The Working Group chair agreed that implementation would have to be discussed at a later day to try to limit market effects. The Academy has conducted impact analysis of its recommendations on specific companies and provided some of its aggregate results. During the discussion, it was decided to separate the needed format changes from the rest of the work being done by the Academy. NAIC staff was instructed to work on a proposal for the format changes to be discussed and possibly exposed for comment at the next meeting.
The group then received and exposed for comment a referral from the RBC Capital Investment Risk and Evaluation Working Group regarding formula treatment of Securities Valuation Office (SVO)-designated funds. Although the proposal was originally drafted specifically for the Life/Fraternal formula, the other RBC groups have been asked if similar treatment might be considered appropriate for all other insurer types. Because of the complexity of the format changes that would be needed for the Health formula, an extended exposure period was implemented ending December 3, 2025. Those commenting also were asked to indicate not only if they thought the changes were appropriate, but if the proposal should include only registered funds or both registered and non-registered funds.
The meeting ended with the chair indicating the Working Group will not be meeting at the NAIC Fall National Meeting in December.
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