What’s next for the rules that govern insurers’ investments: Developments from the NAIC’s 2023 Summer Meeting

The rate of change to the regulatory landscape governing US insurance investments is only accelerating, with broad implications for investment strategy. This report explores developments from the National Association of Insurance Commissioners (NAIC) 2023 Summer National Meeting with possible changes to the treatment of investments. Several initiatives have the potential to result in far-reaching implications for insurers’ investment strategies and capital markets:

  • Classification of investment vehicles, including bonds and residual interest of structured products.
  • Revisions to the definition and oversight of ratings-based designations.
  • Revisions to the capital framework to potentially differentiate Collateral Loan Obligations (CLOs) and structured assets more broadly.

In addition, the investment community closely watched the Financial (E) Committee (E-Committee) meeting to deliberate on its memo that proposes a holistic framework for investment guidelines. The memo could lead to significant implications for the path and outcome of how investment guidelines will be revised. While potential long-term implications are noteworthy, the E-Committee Chair clarified that they “do plan to hear from all interested parties as we finalize this document, but we do not plan to stop any of the work that is currently ongoing,” citing three current initiatives (i.e., those related to CLO model-based designations, differentiation of C-1 capital for structured assets, and SVO discretion over designations). However, it was noted that these are deliberative processes that will continue with no commitment to adoption in their current form.

This report reviews recent developments with efforts to revise NAIC investment guidelines, including the E-Committee memo, their potential implications for investment strategy, and what might happen next.

Bridgeway Analytics
Bridgeway Analytics

Bridgeway Analytics was founded to redefine how insurance investors and their regulators navigate ever-increasingly complex capital markets.

Our solutions democratize the overwhelming set of investment regulations and metrics by codifying and distilling information to what matters most. We bridge practitioner needs for accelerated tactical and strategic decisioning with transparent and intelligent performance metrics. By aligning risk management, investment management, asset-liability management, financial reporting and compliance functions with regulatory requirements, our solutions improve efficiency and income generation.

At Bridgeway Analytics, we strive to create a resilient environment with an equitable culture, where everyone feels seen, heard, valued and empowered.

Luis Leguizamon
Chief of Market Strategy and Client Solutions

Phone: 646.251.9752
1800 Gough Street, #2
San Francisco, CA 94109

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