NAIC 2023 Spring National Meeting Highlights

30 March 2023
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Key takeaways:
  • The NAIC is continuing to consider potential changes to the risk-based capital treatment of residual tranches of certain structured securities, including collateralized loan obligations. The NAIC is proceeding with plans for an interim approach to such structured securities, although the adoption of such an interim measure remains subject to further discussion among regulators. As such, there remains uncertainty around the future capital treatment of CLOs, including their residual tranches, and the SVO “filing-exempt” status for fund and equity investments.
  • The NAIC continues to evaluate whether negative IMR amounts should properly be admitted as assets on insurers’ balance sheets.
  • In line with the growing global regulatory trend, the NAIC is continuing its focus on private equity in the insurance space, notably focusing on investments in insurance companies, the definition of “control” and disclosure requirements for related party investments, as well as certain offshore reinsurance arrangements. The Macroprudential (E) Working Group is in the process of finalizing confidential discussions with industry participants and foreign jurisdictions regarding the use of offshore reinsurers and complex affiliated reinsurance vehicles, with the ultimate aim of producing a template questionnaire to aid state regulators in evaluating these structures.