Highlights from the NAIC’s 2025 Fall National Meeting: Key Developments in Investment RBC, Accounting, and Regulation

CLO RBC Modeling – Sensitivity Analysis

On December 15^th, 2025, the American Academy of Actuaries (Academy) shared an update on its analysis of CLO RBC for 6 sample deals and presented 9 sensitivity analyses of key modeling assumptions. The sensitivities focused on assumptions related to collateral default correlations and distribution, recovery rates, and reinvestment behavior. The Academy found all sensitivities to be materially impactful to results, especially at BBB and below, and with some sensitivities increasing dispersion in results across the 6 deals.

Ultimately the Academy made a recommendation to continue with their baseline assumptions in all cases for a variety of reasons, including consistency with broader C1 bond factor modeling, offsetting impacts, and practical reasons around the time or effort needed to further research. The NAIC has explicitly stated a goal of year-end 2026 implementation, which would require an adopted framework with factors by mid-2026. The Academy’s presentation is exposed for a 45-day public comment period ending January 29th, 2026, and can be found here.

Risk-Based Capital Model Governance (EX) Task Force – Adopted 11 Principles

The Risk-Based Capital Model Governance (E) Task Force met at the Fall National Meeting and adopted 11 “Principles of RBC Requirements” which will “serve as a guiding North Star for governing the purpose and use of, as well as maintaining and prioritizing updates to, RBC requirements”. Among these principles are concepts such as “equal capital for equal risk”, materiality of changes, transparency, and processes aligned with model risk management standards. These principles reflect significant feedback and comments from both industry and regulators over the year. The principles can be found on page 23-24 of the materials here.

The Task Force is now turning to the “gap analysis”, led by Bridgeway Analytics, which will focus first on inventorying all Life investment RBC components to identify gaps, inconsistencies, or stale modeling within the RBC formula. This will inform the Task Force’s prioritization going forward.

Statutory Accounting Principles (E) Working Group Activity

The Statutory Accounting Principles (E) Working Group had an active session with several adoptions and new exposures impacting investment accounting and disclosure:

Adoptions – additional detail in the Hearing materials here.

• Residential Mortgage Trusts (#2025-13): SAPWG adopted eligibility and reporting guidance for trust structures which hold residential mortgage loans. While the revisions are effective January 1^st 2027, early adoption is permitted. Trust structures have become a common mechanism for insurers to access residential mortgage loans, and this adoption provides clear guidance for these structures going forward.
• Investment Subsidiaries (#2024-21): SAPWG adopted its agenda item to remove the concept of investment subsidiaries and kicked off referrals to other working groups to eliminate the concept from statutory reporting blanks and RBC instructions. SAPWG continues looking for industry feedback on any other common use cases for investment subsidiaries which may warrant specific guidance, such as the mortgage loan guidance discussed above.
• Private Placement Disclosures (#2025-19): SAPWG adopted new disclosure and reporting requirements for private placement securities effective for year-end 2026 reporting. Insurers will need to classify the registration of all debt securities as either Public, 144A, Reg D, Section 4(a)2, or “N/A” in the investment schedules, and summary disclosures will include total amounts across the fair value hierarchy (level 1-3), aggregate deferred interest and paid-in-kind interest, and the aggregate amount using a private letter rating as the basis for its NAIC designation.

New exposures open for comment through February 13^th, 2026 – additional detail in the Meeting materials here.

• ALM Derivatives (#2024-15): SAPWG directed NAIC staff to develop an issue paper and statement of statutory accounting principles related to interest rate derivates used for ALM purposes used to hedge duration gaps. The proposed SSAP would allow amortized cost accounting for derivatives which are part of a “macro-hedge” provided that they follow a Clearly Defined Hedging Strategy, which can include both full and partial hedges. This new guidance would reduce balance sheet volatility created by these strategies under current statutory accounting rules and may allow greater adoption of these strategies for risk management.
• Commitments and Contingencies Disclosures (#2025-24): SAPWG is looking to consolidate guidance and reporting related to commitments. The proposed definition describes a commitment as a “legally binding arrangement in which the reporting entity agrees to provide support or resources (most often cash or financial assistance) or to make payments to another party at a future date, but the arrangement does not yet meet the definition of a liability under this statement”, and would be expected to include concepts such as delayed draws or future capital calls. In addition, SAPWG is proposing to add a Commitment for Additional Investment” column to Schedule D-1- and D-1-2, similar to what currently exists on Schedule BA.
• SSAP No. 48 Equity Changes (#2025-26): SAPWG is reviewing SSAP No. 48 covering joint ventures, partnerships, and LLCs to clarify and refine how equity method changes are recognized and reported. While the scope is subject to change, SAPWG highlighted specific issues such as: 1) use of unaudited financials as the basis for equity value changes, 2) improper application of goodwill, especially for investments purchased at a discount to equity value, and 3) drivers of negative reported investment income. SAPWG is requesting feedback on these topics and other potential areas where clarification is needed. This is a continuation of a prior initiative (#2013-36) to review all investment SSAPs.
• Negative IMR: Proof of Reinvestment (#2025-23): SAPWG proposed an annual disclosure to demonstrate that asset sales were used to fund new asset purchases and not for other purposes, which would be required for any insurer whose IMR balance became negative or went further negative. The proposed disclosure requires that both 1) investment purchases exceed investment sales and 2) yields on asset purchases exceed yields on asset sales, with most information pulled from the cash flow exhibit in the annual statement. If these conditions are not met, then net losses in the year must be recognized immediately.
• Modco/FWH Code (#2025-27): SAPWG proposed revisions to increase disclosure of restricted assets which are either 1) modco assets, 2) funds withheld assets, or 3) collateral assets received and on the balance sheet. The proposal would require insurers to disclose these assets in Note 5L to the financials, as well as add these new codes to the restricted asset disclosure in the investment schedules.

Funding Agreement Backed Note Disclosures – Comment Period Extended

The Macroprudential (E) Working Group and the Financial Stability (E) Task Force re-exposed for comment a set of new proposed FABN disclosures to be included in the annual statement blanks. The disclosure includes breakdowns of funding agreement exposure by currency, maturity bucket, coupon type, and the extent to which the funding agreements back different funding agreement-backed products. This follows increased discussion between the NAIC and industry around the FABN market throughout 2025. The comment period on the proposed disclosure ends January 26^th, 2026, and the proposal can be found here.

Valuation of Securities (E) Task Force (VOSTF) Restructuring

As a reminder, VOSTF will be dissolved effective January 1^st, 2026 and will be replaced by the Invested Assets (E) Task Force (IATF). This task force will include three working groups:

• Invested Assets (E) Working Group (InvAWG), which will focus on mainly portfolio-level analysis of insurers, often through regulator-only meetings
• Investment Designation Analysis (E) Working Group (IDAWG), which will focus on individual investment analysis for designation assignment, and will assume most current responsibilities of VOSTF
• Credit Rating Provider (E) Working Group (CRPWG), which will focus on administering the Credit Rating Provider Due Diligence framework that is currently in development

This restructuring is part of the NAIC’s evolution around insurance investment regulation and aligns the Task Force’s structure with the expanded set of responsibilities at the NAIC for investment oversight going forward.