October was a very busy month for NAIC groups working with financial issues. Many (but not all) of the groups will not meet at the upcoming NAIC National Meeting in November but had work that needed completion prior to the National Meeting. Other groups were continuing their ongoing projects. Let’s take a brief look at some of that activity.
Risk-Based Capital (RBC) Investment Risk & Evaluation Working Group – October 5, 2026
Comments were discussed on previous items exposed for comment; a presentation by the American Academy of Actuaries (Academy) on collateralized loan obligations (CLOs) focusing on residual tranches and the Academy’s C-1 subcommittee presentation last December. The Working Group then received a report on asset-backed securities (ABS) that had been reported in Schedule D – Paret 1 – Section 2 at year-end 2025. The report was divided into ABS reporting categories. Among the information provided was aggregate book/adjusted carrying values and the percentage of ABS to cash and invested assets. The report was exposed for a 30-day comment period ending November 5, 2026. As part of the exposure process, the Working Group has asked for comments on how the summary should be used for future work, the availability of data and inputs to model ABS types, and specific comments on three types of ABS regulators have identified as “priorities”; lease-backed securities, ABS backed by individual obligations, and fund finance ABS.
Life RBC Working Group – October 6, 13, 28, & via Email October 20, 2026
The three meetings occurring during October were mostly educational forums. Therefore, there will probably not be detailed minutes for those meetings, although the meeting material was made available in advance of each meeting.
The discussion centered around a referral from the Financial Conditions (E) Committee to the Working Group instructing it to address two issues within the Life RBC formula and to have those revisions in place for year-end 2027 reporting. The two changes were noted as:
- A reinsurance recapture charge for all reinsurance located in a non-reciprocal jurisdiction. The factor would address additional capital that would be required if a ceding company had to recapture the associated reserves.
- An increased credit risk for reinsurers that have lower financial strength ratings, modifying the formula for recoverability risk.
To begin the discussion, the chair announced the two items would be handled separately and the first to be addressed would be the recapture charge. The E Committee implementation deadline meant this Working Group needed to put other projects on hold for the present time. The referral had previously been exposed for comment. Those submitting comments were given an opportunity to summarize those remarks during the session. Comments received included a wide variety of perspectives. After hearing the comments, a discussion of three different methodologies followed, providing regulators with a robust question/answer period. As expected, no decision was reached during the meeting.
October 13 saw the conversation continue. Apparent during this meeting was the number of questions generated by the referral, both from regulators and industry.
The October 28 meeting was not well attended by Working Group members, resulting in there just barely being a quorum to adopt the Working Group’s working agenda. The working agenda had been on the meeting agendas for the last two meetings but was delayed each time. The group then moved on to the current project of reinsurance recapture and counterparty risk. The focus was on the RBC reserve only. Bridgeway Analytics provided a presentation that included a discussion of current C-1 Life RBC treatment of reinsurance and recapture risks that may be faced by the cedent. Other topics included analysis of non-reciprocal jurisdictions reinsurance collateral types and a significant growth in fair value level three assets.
The group will meet during the Fall National Meeting in November. At that time, the goal is to have an initial proposal of the non-reciprocal recapture charge. Prior to that meeting, the Working Group will share materials that will be discussed.
Via an email on October 20, the Working Group, in tandem with the Life Actuarial Task Force, released for comment through November 4, 2026, a document unrelated to reinsurance recapture entitled GOES Model Governance Framework. The document can be found on either group’s webpage under the Exposure Drafts tab.
Statutory Accounting Principles Working Group (SAPWG) – October 7, 2026
This meeting was dedicated solely to the discussion of proposed revisions to Statement of Statutory Accounting Principles (SSAP) No. 7 – Asset Valuation Reserve (AVR) and Interest Maintenance Reserve (IMR) and, in particular, proposed IMR compliance.
The American Council of Life Insurers (ACLI) provided a presentation on the proposal. The session summarized how the ACLI proposes what a way forward might look like. The issues covered included compliance for the handling of IMR in asset adequacy testing (AAT), proof of reinvestment and how that might be captured in the annual statement, identification by companies of liquidity sale losses, and a possible timeline for implementation and follow-up. Regulators actively asked questions and provided comments during the presentation. The presentation was exposed for comment through November 7, 2026 (under the Exposures tab, and then select “ACLI IMR Compliance Proposal,” not 2023-14). SAPWG’s goal is to finalize the proposal at the upcoming NAIC National Meeting in November.
RBC Model Governance Task Force – October 8, 2026
The chair began by providing a summary of what the Task Force has accomplished over its nearly two-year existence. The discussion then moved onto the proposed organization of a financial policy steering group, which had previously been released for comment. The proposal offered two membership options:
- Option 1 would be a small commissioner-level group that would likely report to the Executive Committee. The group would have seven to nine members connected to Capital Adequacy, Invested Assets, Life Actuarial, Financial Analysis, and other Financial Conditions (E) Committee groups, as well as Life Insurance and Annuities (A) Committee representation, and commissioners at large. The NAIC president and president-elect would serve in an ex officio capacity.
- Option 2 has the steering group under the E Committee. Membership could be the same as described under Option 1 but would come primarily from E Committee leadership, task force chairs, senior subject-matter expert regulators and selected commissioners.
Comments received during the exposure period were discussed. In addition, Task Force members were given an opportunity to express their preferences and explain their choices. No decision was made.
The discussion then turned to the process for implementing future changes to the RBC formulas. A document, Aspirational Risk-Based Capital Model Risk Management Guidelines (Guidelines), was briefly discussed and then exposed for comment through November 1. The purpose of the Guidelines is to provide a framework to ensure future RBC revisions meet intended regulatory purposes while outlining the necessary steps to meet that goal. The document stresses changes to the formula should only be offered when meaningful impact to the regulator assessment of solvency risk for all or an identifiable segment of companies is apparent and should only be factors that affect solvency risk while avoiding unnecessary complexity.
The final discussion was the list of material RBC gaps, which had previously been exposed for comment. After hearing comments that had been received, the chair asked the Task Force members to be ready to vote on the list at the upcoming NAIC Fall National Meeting. The goal is to prioritize five to seven issues to begin addressing within the next two years.
Property/Casualty RBC Working Group & Catastrophe Risk Subgroup – via Email October 21, 2026 & October 28, 2026
Via email, the groups released the preliminary 2026 U.S. and non-U.S. Catastrophe Event Lists for comment through October 27. The preliminary listing covers events through September 30, with the final listing extended through December 30 to be issued late in December or early January.
During the October 28 meeting, the Working Group adopted the following two items.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-13-CR | Formally adds severe convective storm catastrophe risk to the formula. | Adopted effective 2027. |
After appearing in the formula to collect data but not affecting the official RBC results, beginning in 2027, severe convective storm catastrophe risk will be formally added to the formula.
| Reference # | Subject | Disposition |
|---|---|---|
| 2026-04-CR | January 1 – September 30, 2026, catastrophe event list. (See discussion in first paragraph.) | Adopted effective 2026 reporting. |
A discussion of climate impact disclosures was next on the agenda. NAIC staff provided a brief analysis of trends that have been observed over the last two years. The analysis will continue through the 2026 RBC filing but then is due to expire. One insurer gave its perspective of use of the current method, noting it felt there were limited benefits and significant costs. It was noted that the extension of the analysis is on the agenda of the upcoming Financial (E) Conditions Committee meeting, as the E Committee would like to extend the analysis time frame.
The Academy provided a very high-level synopsis on needed next steps to consider a possible correlation between perils in the Rcat component of the RBC formula. Its suggestion was to concentrate on correlation between hurricane and severe convective storm risks. However, the Academy noted that it needed to be able to access NAIC data for the analysis and asked for the Working Groups’ assistance in obtaining that information. As part of the analysis, the Academy will look at the impact of adding a Rcat correlation as well as possible sensitivity.
The last action of the meeting was to point out a few editorial changes to the 2026 Property/Casualty RBC publications.
Health RBC Working Group – October 28, 2026
The Working Group discussed its working agenda, noting no new items have been added while some items were updated. Next on the agenda was a referral from SAPWG regarding its exposure of its reference 2026-13 covering Medicaid updates. Since the exposure, SAPWG has been working on a revised version, taking into consideration the comments that were received. SAPWG plans to re-expose the proposal at the upcoming NAIC Fall National Meeting in November. Once the SAPWG proposal has been adopted, the Health RBC Working Group will review it in relation to the RBC formula.
The Managed Care Credit Drafting Group reported its progress on developing a new Exhibit 7 format for the health annual statement reporting. The concept would allow for information to be directly pulled from Exhibit 7 into the RBC. The group’s goal is to have a proposal drafted for review at the next Working Group meeting.
NAIC staff has developed a forecasting tool for the formula H2 factors scheduled for updating in 2027. It was emphasized that the tool is not part of the RBC calculation and is not a regulatory filing tool. The tool allows companies to choose different scenarios for possible underwriting risk revisions that are being considered. Unfortunately, a copy was not available prior to the meeting; however, it has since been posted to the Working Group’s webpage. This Working Group will not meet at the upcoming NAIC Fall National Meeting.
Investment Designation Analysis Working Group – October 28, 2026
The group utilized this meeting to adoption one and expose four other amendments to the Purposes and Procedures Manual (Manual) of the NAIC’s Investment Analysis Office (IAO).
| Subject | Disposition |
|---|---|
| Updates filing exempt treatment of CLOs. | Adopted effective immediately. |
Although modeling of CLOs had previously been adopted (but never implemented), the modeling has since been rescinded. This revision updates the Manual accordingly.
| Subject | Disposition |
|---|---|
| Expands eligibility for NAIC U.S. Government Money Market Fund list to include master/feeder fund structures. | Exposed for comment through November 27, 2026. |
Currently, only funds that invest 100% if their assets in direct obligations of the U.S. government and/or securities that are backed by the full faith and credit of the U.S. government are listed on the U.S. Government Money Market Fund listing (and get special statement reporting treatment.) This revision would expand that list to include certain qualifying master/feeder fund structures.
| Subject | Disposition |
|---|---|
| Updates eligible security identifiers used to file a security with the IAO. | Exposed for comment through November 27, 2026. |
A corresponding statement reporting revision for 2027 has already been adopted, changing the current CUSIP column into the Security Identifier column. Accordingly, the Manual needs to be updated to indicate the identifiers to be used in the statement reporting. The new identifiers are: CUSIP, CINS, PPN, ISIN, LXID, FIGI, and ICEID. Definitions of each can be found in the proposal.
| Subject | Disposition |
|---|---|
| Updates the reporting guidance for the SVO analytical department symbol of “ER.” | Exposed for comment through November 27, 2026. |
The Securities Valuation Office (SVO) has the power to exclude a credit rating provider (CRP) rating for a specific security from the filing exempt process. Insurers will need to identify those securities in their statement filings by using the SVO administrative symbol of ER. The ER will not be included in the NAIC Designation column but instead will be reported in the Investment Characteristics column. The Manual is being updated accordingly. In addition, a proposal for statement reporting is already being considered by the Blanks Working Group for 2027.
| Subject | Disposition |
|---|---|
| Publication of a list of broadly syndicated loan CLOs impacted by the tranche thickness Life/Fraternal RBC guidance. | Exposed for comment through November 27, 2026. |
This proposal was a direct result of work completed by the RBC Investment Risk & Analysis Working Group and applies only to Life/Fraternal RBC formula CLOs with an NAIC Designation of 2.C or below that may require an RBC surcharge if the current tranche thickness is 4% or lower. As a result, this proposed revision would allow the Investment Analysis Office to publish a list of broadly syndicated Loan CLOs impacted by tranche thickness RBC guidance.
This group will not meet at the upcoming NAIC Fall National Meeting.
Financial Conditions (E) Committee – October 29, 2026
After a discussion period on each, the following items were exposed for comment.
| Subject | Disposition |
|---|---|
| Referral from the Natural Catastrophe Risk & Resilience Task Force regarding catastrophe interrogatories in the Property/Casualty RBC and the extension of the current scenario analysis data through 2023 (which is due to sunset this year-end). | Exposed for comment through November 12, 2026. |
| Expands upon the original reinsurance recapture risk for non-reciprocal jurisdictions memo to the Life RBC Working Group. | Exposed for comment through November 12, 2026. |
Interestingly, the E Committee received comment letters regarding the original non-reciprocal jurisdiction memo that had previously been sent to the Life RBC Working Group. Comments indicated that many felt the Committee had acted prematurely by not asking for industry perspectives first and bypassing policies being established by the RBC Model Governance Task Force on determining how RBC changes should be handled.
| Model Law 285 – Disclosure of Material Transactions Model Act. | Exposed for comment through December 28, 2026. |
|---|---|
| Model Law 285 Discussion Memo. | Exposed for comment through December 28, 2026. |
Model Law 285, along with the discussion memo, had previously been released for a preliminary comment process. After receiving those comments and discussing them, both items were released for comment. This time, the goal is toward pinpointing specific revisions that should be considered.
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