NAIC Summer 2026 National Meeting Highlights

Executive Summary:

The NAIC Summer 2026 National Meeting brought an acceleration of regulatory activity in response to insurers’ continued shift toward more complex, illiquid, and less transparent investments, rapid growth in offshore reinsurance, and recent high-profile, aggressive industry practices. Multiple ongoing and new regulatory proposals are on the NAIC’s solvency agenda that would impact statutory reporting and capital treatment; most carry comment deadlines in late September and October 2026, giving industry a near-term window to shape regulatory outcomes.

• ICOLI: Statutory Accounting Principles (E) Working Group (SAPWG) added Insurance Company Owned Life Insurance (ICOLI) to its agenda at regulators’ request, weighing potential new Sch. BA reporting and RBC charges; the item is in the early-stage education phase, with the ability for industry to influence the regulatory proposal and outcomes.
• Principles-based bond definition (PBBD): SAPWG reopened the PBBD with a new proposal precluding structures with “significant” embedded ALM risk from bond treatment; with language broad enough to apply to other structured products, significant industry pushback is expected during the open comment period.
• CLO / ABS RBC: The RBC Investment Risk & Evaluation (E) Working Group (RBC IRE) will revisit three key assumptions within the CLO RBC methodology, with potential refinement to CLO factors in 2027; regulators will examine 2025 Sch. D ABS holdings to identify the next asset class for RBC review, with no explicit directive to study middle-market CLOs.
• Residential mortgage loans (RMLs): SAPWG’s proposal would narrow the definition of RMLs to one-to-four-family properties, while also considering reporting of risk characteristics (LTV, lien position, FICO); a referral asks the Life RBC (E) Working Group to consider risk-based alternatives to the flat 68 bps RBC charge for life insurers.
• Investment regulatory agenda: The newly formed Investment Analysis (E) Working Group plans to next prioritize Level 3 assets given their complexity and less transparent nature, targeting standardized fair-value disclosures, with fund finance and structured product reviews to follow.
• RBC gaps and governance: Regulators presented an initial inventory of 10 RBC gaps and inconsistencies across investments, underwriting, and reinsurance, of which five to seven will be prioritized in a two-year RBC agenda; among the five investment-related gaps, a potential re-prioritization and expansion of the life RBC covariance proposal could meaningfully impact the industry. Regulators also introduced two options for a commissioner-level steering body to govern future RBC changes, though it remains uncertain whether the new standards and processes will apply to in-flight initiatives.
• Offshore reinsurance: With no open comment period, the parent Financial Condition (E) Committee directed the Life RBC (E) Working Group to develop changes to the life RBC formula by year-end 2027 for reserves ceded offshore - with a particular focus on non-reciprocal jurisdictions - to address recapture and counterparty risks.

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