The future direction of the insurance industry’s regulatory landscape will be a key focus at the upcoming National Association of Insurance Commissioners (NAIC) spring meeting.
A new risk-based capital (RBC) task force will convene for the first time at the meeting, according to a report from AM Best. Discussions will also center on data calls and asset adequacy testing.
“It’s going to be a lot of conversations between stakeholders and regulators,” said Carrie Haughawout, senior vice president of life insurance and regulatory policy at the American Council of Life Insurers (ACLI). “Our goal for this meeting is just to continue to promote that transparent dialogue between regulators and industry.”
The NAIC’s spring meeting serves as a critical forum to set priorities for the year, Haughawout explained. The ACLI is particularly interested in the new RBC task force and asset adequacy testing.
The task force is central to the NAIC’s efforts to update RBC formulas, a top priority for 2025, the AM Best report indicated. According to the NAIC, the task force will:
- Assess when new risks should be incorporated into RBC calculations.
- Determine the data needed for setting related factors.
- Examine approaches for addressing emerging risks not currently covered by the framework.
- Review statistical safety levels.
- Establish guidelines for recalibrating formulas to maintain their effectiveness.
Haughawout highlighted the ACLI’s support for a transparent, data-driven approach to RBC processes, adding that the task force is well-positioned to advance this effort. She also noted significant interest, with over 300 participants in the task force’s initial organizational call.
Hilary Segura, department vice president and counsel for state government relations at the American Property Casualty Insurance Association, noted that the group’s future approach could impact insurers’ investment portfolios.
“It’s part of the NAIC’s years-long efforts to take a holistic review of the framework for insurer investments,” Segura said, adding that the work will likely start with life insurers’ investments.
Beyond the new task force, the ACLI is monitoring discussions on asset adequacy testing guidelines, which have undergone significant revision lately, Haughawout said. “The guidelines have changed pretty significantly from when they were first introduced to where we are today, which is a position to finalize a disclosure-only approach.”
The NAIC will also consider updates to its public adjuster model law, with Segura describing it as a positive step. “There’s significant need to bring clarity and openness to the interaction between consumers and public adjusters,” she said.
