NAIC has outlined a number of proposals and regulatory moves ahead of its fall meetings
New York, New York / October 20, 2026 – Regulatory activity is heating up in the insurance industry in advance of the National Association of Insurance Commissioners fall meetings. Early proposals are already causing controversy.
Regulators are moving to raise the capital life insurers must have on hand against reinsurers in non-recognized jurisdictions. Senator Elizabeth Warren has also reached out to NAIC over the insurance industry’s growing connections with private credit. Working groups are slated to meet the first week of October, and following that industry insiders, investors and academics will gather in New York at the AIF Global Fall Insurance Investing Symposium to discuss what these moves might mean for the insurance industry.
Changes to capital requirements
Over the summer the Financial Condition (E) Committee and Life Risk Based Capital (E) Working Group began work on two proposed changes to the life insurance risk based capital formula by year-end 2027.
The first change is a recapture charge on ceded reserves and modified coinsurance balances for reinsurance placed outside reciprocal jurisdictions. Reciprocal jurisdictions currently include Bermuda, the EU, Japan, Switzerland and the UK. However, there are growing insurance industries in other countries including the Cayman Islands and the Bahamas. The second aligns the life insurance risk based capital credit risk methodology with the approach used for property and casualty reinsurers with lower financial strength ratings.
The Cayman International Reinsurance Companies Association (CIRCA) filed two comment letters in response, pushing back on the need for these changes. CIRCA argues that NAIC hasn’t identified whether or not a capital deficiency actually exists before implementing regulatory changes in response to the uptick of business in non-reciprocal jurisdictions. This is a point echoed in other comment letters by the American Academy of Actuaries among others. If the proposals move forward, they say, it would significantly change the economics of offshore reinsurance for life insurers.
Industry groups are calling for the NAIC to reconsider its methodology and take the time to study whether or not a capital deficiency exists before assuming that there is one and making changes to existing frameworks. They argue that identifying the deficiency first has been a core component of the NAIC’s approach in the past and that it provides space for insurers to provide the necessary information back to regulators. NAIC has several meetings scheduled to take place this month that could lead to further refinements to their plans following public comment from the insurance industry.
Insurers connections to private credit under scrutiny
In September, Senator Elizabeth Warren sent a letter to the NAIC questioning whether relying on state insurance commissioners was the best way to regulate the growing relationship insurers have with private credit. In the letter, Senator Warren highlighted the complexity and opacity of private credit investments along with revelations that a group of insurers tied to Guggenheim Partners CEO Mark Walter are at the center of a federal probe over misclassification of assets.
NAIC responded with their own lengthy outline of the steps the regulator has taken to improve its oversight of insurance portfolios as well as its work with insurers to ensure that investments are appropriately classified and have adequate capital reserves.
The regulator also highlighted recent increases in risk based capital charges for residual interests in higher risk structured securities.
The questions from Senator Warren and the subsequent response from NAIC should stay on the radar of insurance industry professionals as they may mark a point of future regulatory evolution. Apollo Global Management CEO Marc Rowan has used this moment to call for a more unified regulatory standard that does not rely on individual state agencies. Senator Warren and Marc Rowan raising the same criticism makes for an unlikely pairing and could indicate this issue may come up again in the future.