NAIC ADOPTS KEY INITIATIVES TO HELP ENSURE PAYMENT OF CLAIMS AUG. 21, 2025

The following information was released by the National Association of Insurance Commissioners (NAIC):

Last week, during the National Association of Insurance Commissioners' (NAIC) Summer National Meeting in Minneapolis, Minn., NAIC members voted to adopt three proposals that will further protect consumers by helping guarantee insurers have the resources to pay policyholders' claims. This action comes after the NAIC Life Insurance and Annuities (A) Committee passed the proposals in July.

"One of our most important responsibilities as state insurance regulators is ensuring companies are responsible financial stewards and have the resources to keep their obligations to policyholders. These initiatives will increase the information available to regulators and companies to help each make the best decisions in an evolving landscape and marketplace. I want to thank all the regulators who developed and advanced each of these products for their outstanding work," said Ohio Department of Insurance Director and NAIC Life Insurance and Annuities (A) Committee Chair Judith L. French.

NAIC members adopted:

A new Generator of Economic Scenarios (GOES), which is designed to capture both the low-interest-rate environment of the last decade and the rate increases seen in the past few years. The updated generator will be used in life insurers' calculations of principle-based reserves and capital needed to pay future claims.

Principle-based reserving requirements for non-variable (i.e., fixed) annuities, which have become popular under the higher interest rates of the past few years. This approach is designed to more accurately capture risk across a broad array of non-variable annuity products while promoting sound risk management practices at life insurance organizations.

Actuarial Guideline 55, which requires additional disclosures on certain reinsurance contracts to ensure life insurance companies still have adequate reserves after transferring risk to a reinsurer. This new requirement is especially important given life insurers' increased use of reinsurance as they seek more capital to support rising sales of fixed annuities.