The National Association of Insurance Commissioners (NAIC) has detailed changes to U.S. state insurance regulation aimed at addressing risks associated with private credit, private equity ownership and increasingly complex investment and reinsurance arrangements.
In a September 24, 2026, response to U.S. Senator Elizabeth Warren, the organization outlined reforms to capital requirements, financial reporting, investment oversight and actuarial standards intended to strengthen insurer solvency and policyholder protection.
- The NAIC outlined regulatory reforms addressing private credit exposure, private equity ownership, complex investments and affiliated transactions in a September 24, 2026, letter to Senator Elizabeth Warren.
- State insurance regulators have introduced a 45% risk-based capital charge for residual interests in structured securities and strengthened reserve adequacy testing through Actuarial Guidelines 53 and 55.
- New investment reporting requirements taking effect for year-end 2026 will increase transparency around private placements, credit ratings, asset valuations and related-party transactions.
The letter addresses growing regulatory scrutiny of relationships between insurers and private investment firms, particularly within the life insurance sector, where alternative asset managers have expanded their involvement in investment management and ownership structures.
According to the NAIC, prolonged low interest rates encouraged life insurers to pursue higher-yielding investments, including less-liquid and structurally complex assets. These strategies created additional supervisory questions involving credit quality, valuations, affiliated transactions and the adequacy of assets supporting long-term policyholder obligations.
“Rather than relying on a static regulatory framework, regulators have regularly updated capital requirements, reporting standards, supervisory tools, and analytical capabilities to address emerging risks while maintaining a consistent focus on insurer solvency and policyholder protection,” NAIC leadership said.
NAIC strengthens capital requirements for structured securities
Among the changes, regulators introduced a 45% risk-based capital (RBC) charge for residual interests in structured securities, which typically absorb losses before more senior investment tranches.
The requirement is designed to align regulatory capital with the underlying risks of these investments and provide insurers with additional capacity to absorb potential losses.
Regulators also adopted revised RBC factors for collateralized loan obligations (CLOs), effective for year-end 2026, including additional capital treatment for certain lower-rated tranches exposed to severe economic stress.
The NAIC has also strengthened actuarial oversight through Actuarial Guideline 53 (AG 53), which assesses whether complex and higher-yielding assets can adequately support life insurance reserves under adverse conditions.
Actuarial Guideline 55 (AG 55) introduces additional scrutiny of certain life insurance and annuity reinsurance transactions, particularly those involving offshore affiliates, captives and other reinsurers operating under different reporting requirements.
The first AG 55 filings were submitted in 2026. Regulators are reviewing the adequacy of supporting assets, reserve assumptions, liquidity and capital available following reinsurance transactions.
AG 55 does not automatically require additional reserves, but provides regulators with information to determine whether higher reserve levels may be necessary.
Private credit reporting and credit rating oversight expand
Beginning with year-end 2026 financial statements, insurers will be required to provide standardized disclosures covering private investments, including their classifications, valuations, payment-in-kind interest and reliance on private credit ratings.
The NAIC is also developing a Credit Rating Provider Due Diligence Framework to assess whether external rating methodologies and their corresponding regulatory classifications appropriately reflect investment risks.
Its Securities Valuation Office has authority to challenge ratings used for regulatory purposes when there are concerns that they do not accurately represent underlying credit exposure, subject to regulatory review and procedural safeguards.
The association noted that approximately 13% of insurer invested assets fall within a broad definition of private credit, while newer forms attracting greater regulatory attention account for less than 6%.
The reforms also expand transparency around related-party investments and affiliated asset-management agreements, including potential conflicts of interest, investment authority and fee arrangements.
The NAIC maintained that regulatory requirements should reflect the economic risks insurers assume rather than their ownership structures alone. Private equity-owned insurers remain subject to the same fundamental solvency and policyholder protection standards as other insurers.
“State insurance regulators continually evaluate whether the solvency framework appropriately captures emerging and changing risks,” NAIC leaders said.
The organization argued that its continuing reforms demonstrate the ability of state-based insurance supervision to respond to changing financial markets, while maintaining that company-specific examinations and enforcement remain the responsibility of individual state insurance departments.
