As industry was finishing its first-quarter 2026 reporting, the NAIC was pushing to finalize Risk-Based Capital (RBC) formats by May 15 and annual statement reporting for 2026 by June 1. For that to happen, many of the RBC Working Groups held meetings, the Capital Adequacy Task Force had to put its stamp of approval on RBC Working Group adoptions, and the Statutory Accounting Principles Working Group (SAPWG) needed to finalize some accounting guidance prior to the meeting of the Blanks Working Group. Let’s take a look at what happened.
RBC Investment Risk & Evaluation Working Group (RBC IRE) – May 6 & May 11, 2026
Scheduled for two hours on May 6, the Working Group was not able to work through its entire agenda in a timely manner. Consequently, another meeting was scheduled.
| Reference # | Subject | Disposition |
|---|---|---|
| N/A | Collateralized Loan Obligations (CLOs) RBC C1 Residuals and Portfolio Adjustment Factors presentation. | Exposed for comment through July 6, 2026. |
The above is an update of findings since April 10, 2026, provided by the American Academy of Actuaries (Academy) on its continuing effort to revise the Life RBC for more granular reporting of various aspects of CLOs. This presentation covered modeling performed for residual tranches and the portfolio adjustment. The presentation during the meeting was a brief summary, but the exposure is quite detailed.
The discussion then moved on to comments received on the Academy’s March 2 presentation regarding CLO C-1 factor modeling. The Working Group received 15 comment letters, including two from state departments of insurance. Although most of the letters thought the Working Group was heading in the right direction, the comments were not unanimous in their opinions of some of the elements presented. Many suggested using a limited 2026 implementation with a 2027 continuing phase-in. In particular, most were in favor of separating broadly syndicated loan (BSL) CLOs and middle-market (MM) CLOs, which is currently not proposed. These comments are directly related to proposal 2026-12-IRE (see below) and will be discussed more in the future. Because credit ratings of the CLOs are part of the modeling, the Working Group decided to send a referral to the Credit Rating Provider Working Group but will not delay forward progress awaiting a response. (See May 11 summary for additional information.)
| Reference # | Subject | Disposition |
|---|---|---|
| 2025-22-IREv Version 2 | RBC structural change dividing long-term bonds into two buckets; 1) CLOs, Collateralized Bond Obligations (CBOs), Collateral Debt Obligations (CDOs), and 2) all other long-term bonds. | Adopted effective 2026. |
This is a structural and corresponding instructional change only and does not include residual tranches. Prior to adoption, there was disagreement with some of the instructions regarding which bonds to include in which categories. Since format changes needed to be in place by May 15, 2026 for 2026 implementation, it was decided to adopt the proposal as is. However, instructional changes are allowed through the end of June, so there still might be some instructional revisions. Factors will be updated later, as they have an end-of-June deadline.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-12-IRE | CLO RBC factors along with Academy presentation on portfolio adjustment factors. | Exposed for comment through June 5, 2026. |
Running short on time and with a factor adoption deadline approaching in June, the Working Group decided to expose this proposal without preceding discussion. Accordingly, the Academy presentation on the portfolio adjustment factors was released as a companion document.
During the follow-up May 11 meeting, the Academy went into detail regarding its work on the RBC portfolio adjustment factors (PAF). This was part of the presentation released for comment during the May 6 meeting. The Academy offers two different approaches to the PAF.
- Option 1 – set PAF to one regardless of the number of CLOs owned and the number of underlying issuers,
- Option 2 – factor would vary according to the number of CLOs owned and the number of underlying issuers.
A revised proposal 2026-12-IRE was then released for comment with the same comment deadline as noted above. The revisions included instructions regarding Option 1 and Option 2, as well as factors that had not been included with the adopted structural change (2026-22-IRE).
The next item on the agenda was the review of a draft referral to the Credit Rating Provider Working Group (CRPWG). The intent of the referral is to notify the CRPWG of rating agency methodologies in predicting expected losses that were discovered during the RBC IRE’s project to develop RBC factors for CLOs. The Academy found that there was a difference between agencies in whether rating methodologies incorporated expected loss or only probability of default into their assessment of credit risk. The question posted to CRPWG is whether this difference should result in different NAIC designations.
Health RBC Working Group – May 7, 2026
This Working Group had a fairly short agenda.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-03-CA | Annual update of the investment income adjustment underwriting factors and addition of a separate line for the reporting. | Referred to Capital Adequacy Task Force. |
Since this proposal also affects the health sections of the Life/Fraternal and Property/Casualty RBC formulas, it was referred to the Capital Adequacy Task Force where it is anticipated it will be exposed for comment for 30 days. When adopted, the change would be effective for calendar 2026 reporting.
The discussion then turned to comments received on a previously exposed phase-in analysis document. The analysis looked at using a three-year phase period for the new H-2 underwriting risk factors and premium thresholds beginning in 2027. The possibility of a phase-in is being discussed because of the number of companies that would experience strong adverse changes to their RBC action level if the full factor and premium tier changes were enacted at once. In fact, the three comment letters received still expressed concern even with a three-year phase in. The Working Group is still waiting on a response from the Academy regarding some questions that had previously been submitted and were the result of previous discussions. Those responses may address some of industry’s concerns.
While the Working Group awaits responses to those questions, it was decided to continue forward by drafting revised definitions of the different health lines of business. To accomplish this goal, a new managed care drafting group will be formed, composed of both regulators and industry representatives.
The last agenda item covered industry’s concern regarding the data being used by the Academy to arrive at the proposed underwriting risk factors. Industry was concerned that the data was “old” and included some volatile years that might skew the analysis. The data being used covers 2012 to 2022, which included the implementation of the Affordable Care Act and the COVID-19 pandemic. Accordingly, NAIC staff presented some further analysis that added 2023 to 2025 to the data. The results of that analysis were released for a comment period ending June 8, 2026. The chair asked that comments received include suggestions for any other data elements that could be used to make industry more comfortable with the results.
Joint Meeting of the Property & Casualty RBC Working Group & Catastrophe Risk Subgroup – May 12, 2026
This was the first meeting of these groups since the NAIC Spring National Meeting.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-08-CR | Removal of interrogatories D13 and D14 regarding convective storms from the Rcat. | Adopted effective 2026. |
| 2026-11-P | Annual update of underwriting risk line 1 factors. | Exposed for comment through June 11, 2026. |
| 2025-21-P | Updates loss and premium concentration factors. | Exposed for comment through June 11, 2026. |
The above proposal is the result of work done by the Academy. The current maximum diversification credit is 30%. The Academy determined that 45% of premium and 65% for reserves are better supported by the current data.
The chair of the subgroup provided an update on severe convective storms impact analysis. Convective storm risk has been included in the current RBC formula on an information only status and has not affected company’s official RBC results. The goal is to officially include the risk in the 2027 RBC formula.
The discussion then turned to the climate impact disclosures. These disclosures were added for information only to the formula in 2024. The group has been analyzing the collected data and will soon be analyzing the cost benefit of possibly adding the risk to the RBC. After the cost benefit analysis, a decision will be made to continue with the disclosures or dismiss them.
Attendees were reminded of a June 18 joint meeting of the RBC Model Governance Task Force and the Capital Adequacy Task Force. On the agenda for that meeting is the possible adoption of a modified version of the RBC preamble. In addition, attention was drawn to the formation of a new NAIC task force—the Natural Catastrophe Risk and Resilience Task Force. The new task force will have two working groups reporting to it—the Pre-Disaster Mitigation and Risk Modeling Working Group and the Severe Peril Working Group.
Capital Adequacy Task Force – May 14, 2026
The primary goal of this meeting was to adopt or expose proposals that would be applied to the 2026 RBC formula. Readers will notice some duplication in the list below from other RBC working group summaries, as those groups have addressed most proposals prior to action being taken by the Task Force. Where that is the case, further details are not included here. All adopted items will be effective for 2026, while exposed items hope to be adopted and applied to the 2026 formula.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-03-CA | Updates Health underwriting risk investment income factors and separate reporting line (all formulas). | Exposed for comment through June 15, 2026. |
| 2025-15-CA | A&H Underwriting risk structure changes expanding lines of business (all formulas). | Adopted effective 2026. |
| 2026-08-CR | Elimination of convective storm interrogatories in the Rcat (P/C). | Adopted effective 2026. |
| 2025-22-IRE V.2 | RBC structural change dividing long-term bonds into two buckets; 1) CLOs, Collateralized Bond Obligations (CBOs), Collateral Debt Obligations (CDOs), and 2) all other long-term bonds (L/F). | Adopted effective 2026. |
| 2025-14-L | GOES implementation in C-3 risk of the Life/Fraternal RBC. | Adopted effective 2026. |
| 2026-07-L | Creates separate reporting of longevity reinsurance in the Life/Fraternal RBC; however, for 2026 the factor is set to zero. | Adopted effective 2026. |
| 2026-05-CA | Removes investment affiliate code 4 (all formulas). | Adopted effective 2026. |
The above proposal did not come from one of the working groups, but rather was the result of a referral from SAPWG indicating a statement change eliminating the reporting category of investment subsidiaries. There was a lot of discussion on this topic. Industry was concerned about having to include investment affiliates in the “Other affiliates” category, resulting in a high RBC charge. This was a concern particularly for Life/Fraternal companies that had been allowed to use a look-through to the underlying assets of the subsidiary when calculating its RBC. In addition, industry commented that the elimination of this category may mean that management agreements need to be revised, will definitely have tax ramifications, and companies may want to do some restructuring of their investments. In the end, the proposal was adopted; however, further discussion will occur, which may result in some instructional changes. Remember, instructional changes for 2026 can be put in place through the end of June.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-10-CA | Change collateral loan source references in P/C and Health formulas due to statement revisions. | Exposed for comment through June 15, 2026. |
| N/A | Task Force proposed charges for 2027. | Exposed for comment through June 15, 2026. |
The proposed 2027 charges take a little different approach than what has been seen in the past. Previously, the Task Force mostly reacted to issues brought before it from the various working groups. However, the recent RBC policies adopted by the RBC Model Governance Task Force, as well as modifications being contemplated for the RBC Preamble, indicate addressing RBC issues should start at the top for evaluation and then be referred down to the working groups. Many of the new goals for 2027 reflect this change in policy, indicating the Task Force should monitor things happening outside of the realm of RBC that may need to be reflected in RBC. Other charges outline activities of the working groups going forward, including the elimination of groups that have completed their objectives.
A brief informational discussion followed regarding a change in the reporting of security identifiers within statement reporting. This change has no current direct effect on RBC.
Statutory Accounting Principles Working Group – May 18, 2026
Many of the agenda items covered in this meeting were needed prior to the Blanks Working Group finalizing corresponding statement reporting changes. Adopted items are effective immediately unless otherwise noted.
| Reference # | Subject | Disposition |
|---|---|---|
| 2025-13 | Finalizes Issue Paper No. 172 – Qualifying Statutory Trusts. | Adopted. |
| 2026-35EP | Various editorial changes. | Adopted. |
| 2026-01 | SSAP No. 52 revisions define different types of funding agreement-backed notes (FABNs) and provide disclosure requirements for FABNs and similar structures. | Adopted. |
| 2026-02 | Clarifies the valuation of reinsurance funds withheld under SSAP No. 61 (for life/fraternal insurers). | Re-exposed for comment through June 22, 2026. |
| 2025-27 | Increases assets to be included in the restricted assets disclosure under SSAP No. 1. | Adopted. |
This proposal originally had several working parts to it. Revisions to SSAP No. 1 added collateral assets received and on the balance sheet, assets under modco reinsurance agreements, and assets held under funds withheld reinsurance agreements to the restricted assets disclosure. This part was adopted. In addition, SAPWG had asked regulators to comment on whether the “Restricted Asset Code” column should be deleted from statement reporting in the investment schedules. The usefulness of this column was questioned because a listed investment may not be completely restricted. For example, a $1 million bond might have $500,000 pledged as collateral for a specific transaction, but the remaining $500,000 is not restricted. There is currently no way to indicate if an asset is partially or wholly restricted. Since the Working Group only received comments from one department of insurance on this issue, the Group deferred any decision on deleting or not deleting the column.
| Reference # | Subject | Disposition |
|---|---|---|
| 2024-15 | Creates a new SSAP No. 109 providing guidance on asset liability management derivatives. | Re-exposed for comment through June 22, 2206. |
| 2026-04 | Provides updated terminology to SSAP No. 24, but rejects Accounting Standards Update 2025-10, Accounting for Government Grants Received by Business Entities. | Exposed for comment through June 22, 2026. |
| 2026-05 | Clarifies restricted asset reporting for securities lending transactions reporting through revisions to SSAP No. 1. | Exposed for comment through June 22, 2026. |
| 2026-06 | Deletes exclusion of investments using an equity valuation method in the SSAP No. 100 fair value disclosure. | Exposed for comment through June 22, 2026. |
| 2026-07 | Addresses reporting of subsidiary, controlled, or affiliated (SCA) common stock within the annual statement, but no revisions to SSAPs. | Exposed for comment through June 22, 2026. |
Proposal 2026-07 is the result of a referral from the Life RBC Working Group and contained questions regarding the reporting of SCA common stock in the asset valuation reserve (AVR).
Investment Designation Analysis Working Group – via email May 27, 2026
This new working group exposed a white paper, NAIC_CRP Due Diligence Framework, for a 60-day comment period through July 3, 2026. In addition, written questions will be accepted through June 3, 2026. The paper addresses the current dependency of U.S. insurers translating credit rating provider (CRP) opinions to NAIC designations via an established conversion process, while proposing a new due diligence framework.
Blanks Working Group – May 28, 2026
After adopting minutes of its previous meeting, the Working Group moved on to proposals that had been deferred during that meeting. Unless otherwise noted, adopted proposals apply to all statement types. All adopted items are effective beginning with year-end 2026.
| Reference # | Subject | Disposition |
|---|---|---|
| 2025-23 | Adds nonadmitted assets to separate accounts, updating the necessary statement pages. | Adopted. |
| 2025-24 | Expands Note to Financials (Note) #18B to disclose amounts received and paid to/from Administrative Services Contracts. | Adopted. |
| 2025-25 | Revises Note #2 to include references to Valuation Manual (VM) -20. | Adopted. |
| 2025-26 | Updates expense reporting categories and instructions for all reporting entities. | Adopted. |
| 2025-27 | Provides a new AVR section for CLOs/CBOs/CDOs in the Life/Fraternal statement; adds a new footnote to Schedule D – Part 1 – Section 2 for all statements. | Adopted. |
| 2025-29 | Enhances reporting of restricted assets in the investment schedules and revises Note #5L presentation. | Deferred with comment period ending July 27. |
Action was taken on the following items, which had been exposed for comment during the previous meeting.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-01 | Disclosure revisions to Note #26 for the transfer of assets for an existing intercompany pooling arrangement where the fair value differed from the statement value. | Adopted. |
| 2026-02 | Adds a crosscheck from Note #11B to General Interrogatory (Gen Int) #26 for Federal Home Loan Bank agreements, adds footnote instructions to Exhibit 7 in the Life/Fraternal statement, and adds the footnote to Exhibit 4 in the Separate Accounts statements. | Adopted. |
| 2026-03 | Updates various exhibits and supplements and adds a new supplement for VM-22 reserve reporting in the Life/Fraternal statement. | Adopted. |
| 2026-04 | Changes to Note #11 add a section for the reporting of FABNs; adds a footnote to Exhibit 7 in the Life/Fraternal statement and to Exhibit 4 in the Separate Accounts statement. | Adopted. |
| 2026-05 | Requires explicit identification of assets valued using net asset valuation. | Adopted. |
| 2026-06 | Adds a reconciling adjustment line to Note 5L(1) identifying assets pledged under multiple arrangements. | Adopted. |
| 2026-07 | Clarifies the payment due at maturity column in both Schedule D – Part 1 and Schedule BA and the origination balloon payment percentage column in Schedule D – Part 1 – Section 2. | Adopted. |
| 2026-08 | Expands Schedule T license status codes to include “O” for entities with a unique restricted license; adds footnote to explain what that license is. | Adopted. |
| 2026-09 | Requires reporting of short-term and cash equivalent affiliated investments in the Five-Year Historical data. | Adopted. |
| 2026-10 | For Life/Fraternal companies, clarifies the reporting of liabilities for funds withheld reinsurance agreements. | Deferred with comment period ending July 27. |
| 2026-11 | Increases reporting in Note #5A to include mortgage loans acquired though a qualifying trust. | Adopted. |
| 2026-12 | Sets the AVR reserve objective and maximum reserve factors to zero for collateral loans for the Life/Fraternal statement. | Adopted. |
| Editorial listing corrections to the Exhibit of Nonadmitted Assets, Notes 5L(1), 5L(4) #8A(4), the Health Analysis of Operations, Schedule E – Part 1, Schedule Y – Part 1A, Schedule B, Schedule BA, Gen Int – Part 1 #16.6, and VM-22 Reserves Supplement Part 1A. | Adopted. |
The following new items were exposed for comment. If adopted, they would not be effective until 2027.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-13 | Adds a status code to the cybersecurity and flood supplements in the Property/Casualty filing. | Exposed for comment through July 27. |
| 2026-14 | Updates the Property/Casualty Schedule P instructions. | Exposed for comment through July 27. |
| 2026-15 | On investments schedules, changes the “CUSIP” column to “Security Identifier” column and provides instructions on what to report. | Exposed for comment through July 27. |
| 2026-16 | Removes the exclusions for investments accounted for under the equity method from Note #20C. | Exposed for comment through July 27. |
Although adoption of 2026-16 technically shouldn’t be effective until 2027, if adopted it is anticipated that SAPWG will provide a memorandum to the Blanks Working Group requiring the disclosure change for year-end 2026. SAPWG feels this is feasible, since the disclosure is a variable line schedule and, therefore, can be accomplished without any statement format changes.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-17 | Revises Gen Int #25.04 and #25.05 replacing the term “amount of collateral” to “assets lent” and changes terminology in Note #5L(1) from “collateral held under security lending agreements” to “assets lent under security lending agreements.” | Exposed for comment through July 27. |
The Working Group received a memorandum from the Securities Valuation Office regarding proposal 2026-15 (see above).
The final action was to expand the line numbering system used in Schedules B from seven digits to 10 digits.
If you have any questions or need more information, please reach out to a professional at Forvis Mazars.