{
  "kind": "story",
  "slug": "highlights-from-the-naic-s-2026-spring-national-meeting-clos-9746556",
  "id": 1777099671219746556,
  "record_id": 1777097376699862664,
  "headline": "Highlights from the NAIC's 2026 Spring National Meeting: CLOs, Collateral Loans, and RBC Model Governance in the Spotlight",
  "summary": "The NAIC's Spring 2026 National Meeting addressed accelerating regulatory changes for insurance investments, with concrete proposals emerging for CLO risk-based capital (RBC) factors and collateral loan RBC. Key discussions included the potential expansion of CLO factors to middle-market loans and a move towards a look-through approach for collateral loan RBC. The meeting also highlighted ongoing efforts in RBC model governance and statutory accounting updates, signaling increased regulatory scrutiny and a push for greater transparency in insurer portfolios.",
  "source": "kkr-insights",
  "source_url": "https://kkr.com/insights/naic-spring-update-2026",
  "home_domain": "economics-business-work",
  "claim_type": null,
  "sentiment": "neutral",
  "significance": "high",
  "claim_count": 103,
  "reading_time_minutes": 9,
  "published_date": "2026-04-07",
  "created_on": "2026-05-04T01:06:08.956829+00:00",
  "claims": [
    {
      "id": 1777856769589240620,
      "text": "The Academy of Actuaries has published a full set of proposed C-1 factors for CLO tranches.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769749299591,
      "text": "The proposed approach for collateral loan RBC moves to a look-through framework.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769881461209,
      "text": "The Model Governance Task Force continues to develop the governance infrastructure for evaluating and prioritizing future RBC changes.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856770017111849,
      "text": "SAPWG exposed a new draft SSAP and issue paper that would allow amortized cost accounting for qualifying interest rate derivatives used in ALM macro-hedging programs.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769602016945,
      "text": "The proposed C-1 factors are based on modeling of broadly-syndicated loan (BSL) CLO deals.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769612342548,
      "text": "The factors use a CTE(90) framework, consistent with existing C-1 bond factors.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769621416730,
      "text": "Security rating serves as the primary risk differentiator for the proposed CLO C-1 factors.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769629709264,
      "text": "Tranche thickness provides an additional layer of differentiation for BBB- and lower-rated tranches.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769633633952,
      "text": "The Academy of Actuaries shared additional details of the regression model used to calibrate the factors at the National Meeting.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769637939178,
      "text": "Interested parties requested model details to provide thoughtful comments ahead of the April 16th, 2026 comment deadline.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769641545643,
      "text": "Senior investment-grade CLO tranches (Aaa-A2) would carry C-1 factors of roughly 0.03-0.14%.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769653963644,
      "text": "A3 to Baa3 CLO tranches would carry C-1 factors of 1.8-2.7%, representing a 0.5-1.5% increase over current factors.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769663628423,
      "text": "A Baa3 tranche with more than 4% thickness would carry a 2.7% factor.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769664006720,
      "text": "A Baa3 tranche with less than 4% thickness would face a 12.5% charge.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769669451289,
      "text": "Charges increase steeply for below investment grade-tranches, with many carrying C1 charges higher than equity investments or residual tranches.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769673667988,
      "text": "The most consequential open question is whether these factors will apply only to BSL CLOs or extend to middle-market loan (MML) CLOs.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769681685117,
      "text": "The Academy of Actuaries' analysis for CLO C-1 factors was performed exclusively on BSL data.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769689584971,
      "text": "The Academy of Actuaries noted that while ratings should be predictive for MMLs, the tranche thickness component warrants separate study for MML CLOs.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769693172468,
      "text": "The American Council of Life Insurers has proposed distinct reporting categories for BSL, MML, and non-CLO structures.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769697050648,
      "text": "Regulators did not reach consensus on applying BSL factors to MMLs, with some viewing them as a reasonable proxy and others acknowledging meaningful differences.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769701654312,
      "text": "The debate on MML CLOs will continue through the comment period ending April 16th and into the Summer National Meeting.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769709345313,
      "text": "The National Association of Insurance Commissioners continues to target year-end 2026 for implementation of the CLO Risk-Based Capital framework.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769713778859,
      "text": "Year-end 2026 implementation requires an adopted structural framework by mid-year.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769717675735,
      "text": "Updates on portfolio adjustment factors and residual tranche treatment for CLOs are expected in early April.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769721181594,
      "text": "The Life Risk-Based Capital (E) Working Group is developing a revised framework for collateral loan RBC.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769725363039,
      "text": "Currently, collateral loans are subject to a uniform base factor of 6.8% for life insurers.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769737645932,
      "text": "The National Association of Insurance Commissioners is working to refine the collateral loan RBC approach, particularly for loans backed by JV/LLC interests or residual tranches.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769738035865,
      "text": "Underlying RBC charges for JV/LLC interests or residual tranches are significantly higher (30-45%).",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769753530637,
      "text": "The look-through framework means the RBC charge reflects the nature of the underlying collateral, with adjustments for overcollateralization.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769757614982,
      "text": "The American Council of Life Insurers has supported this direction and proposed a framework that haircuts the base RBC charge based on loan-to-value ratio.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769761333134,
      "text": "The American Council of Life Insurers' proposed framework reflects credit enhancement provided when the loan balance is less than the collateral value.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769762479510,
      "text": "The National Association of Insurance Commissioners modified their exposure to match American Council of Life Insurers' proposal for collateral loan RBC.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769769813612,
      "text": "The National Association of Insurance Commissioners has expressed concerns about valuation methodologies used in overcollateralization calculations for collateral loans.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769770707000,
      "text": "Regulators are looking for industry to propose prudent solutions for valuation methodologies as part of their comments.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769781589291,
      "text": "Comments on the collateral loan RBC proposal are due by April 13th.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769793992621,
      "text": "Adoption of the collateral loan RBC framework is likely for year-end 2027.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769797199816,
      "text": "The Invested Assets (E) Task Force (IATF) held its inaugural session.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769801063912,
      "text": "Neuberger Berman presented on residential mortgage loans (RMLs) at the IATF session.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769805553762,
      "text": "Residential mortgage loans have seen rapid growth in insurer portfolios.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769813328416,
      "text": "The presentation provided an overview of RMLs, major subsectors, reasons for insurer allocation growth, and key risk factors.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769817116522,
      "text": "Regulators responded to the RML presentation with balanced and curious questions.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769821351780,
      "text": "The constructive tone is consistent with the IATF's stated goal of engaging with industry to understand investment trends.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769833682993,
      "text": "Regulators welcomed similar presentations on other asset classes in the future.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769837163125,
      "text": "For insurers with meaningful RML exposure, this dynamic is encouraging but signals continued regulatory attention.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769841116320,
      "text": "Regulatory attention to RMLs may include potential disclosure and RBC enhancements.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769849563224,
      "text": "January 1st, 2026, marked the end of the Valuation of Securities Task Force (VOSTF).",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769853740935,
      "text": "The Invested Assets (E) Task Force (IATF) is the successor to the Valuation of Securities Task Force (VOSTF).",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769861818658,
      "text": "The new IATF structure includes three dedicated working groups: Investment Designation Analysis (IDAWG), Investment Analysis (InvAWG), and Credit Rating Provider (CRPWG).",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769873883059,
      "text": "The restructuring reflects the expanding scope and complexity of insurance investment oversight.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769885703730,
      "text": "The Model Governance Task Force received comments on the Bridgeway Analytics-led gap analysis.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769893007414,
      "text": "The gap analysis surfaced a wide range of potential issues, from asset-specific calibration inconsistencies to broader structural gaps across Life, Health, and P&C formulas.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769897953428,
      "text": "The Model Governance Task Force will review and discuss these comments in the coming months.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769909226117,
      "text": "The Model Governance Task Force discussed a draft decision-tree process for RBC adjustments.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769913013472,
      "text": "The decision-tree process is designed to ensure policy alignment before technical groups undertake extensive work.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769917806857,
      "text": "Some regulators signaled a need for technical group input before making informed policy decisions on RBC adjustments.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769921254589,
      "text": "The Model Governance Task Force will continue to develop a process framework that balances top-down policy and bottom-up technical considerations.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769933409912,
      "text": "The Model Governance Task Force's initiatives remain early-stage but are important to follow.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769941245125,
      "text": "The governance frameworks established by this group will have a meaningful impact on how RBC formula changes are made.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769945956803,
      "text": "At the Fall 2025 meeting, the Model Governance Task Force adopted 11 principles for evaluating existing and future RBC components.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    },
    {
      "id": 1777856769949139707,
      "text": "The adopted principles focus on \"equal capital for equal risk,\" materiality, and transparency.",
      "evidence_type": "paraphrase",
      "confidence": "stated",
      "home_domain": "economics-business-work",
      "published_date": "2026-04-07"
    }
  ],
  "tags": [
    {
      "id": 17733571770138248,
      "slug": "american-academy-of-actuaries-organization",
      "name": "American Academy of Actuaries",
      "type": "organization"
    },
    {
      "id": 17724183045271733,
      "slug": "american-council-of-life-insurers-organization",
      "name": "American Council of Life Insurers",
      "type": "organization"
    },
    {
      "id": 17733571770187724,
      "slug": "bridgeway-analytics-organization",
      "name": "Bridgeway Analytics",
      "type": "organization"
    },
    {
      "id": 17723038993596149,
      "slug": "kkr-organization",
      "name": "KKR",
      "type": "organization"
    },
    {
      "id": 17724155286905471,
      "slug": "national-association-of-insurance-commissioners-organization",
      "name": "National Association of Insurance Commissioners",
      "type": "organization"
    },
    {
      "id": 17733540962016804,
      "slug": "neuberger-berman-organization",
      "name": "Neuberger Berman",
      "type": "organization"
    },
    {
      "id": 17733540797350257,
      "slug": "pwc-organization",
      "name": "PWC",
      "type": "organization"
    },
    {
      "id": 17730965647959732,
      "slug": "securiti-organization",
      "name": "Securiti",
      "type": "organization"
    },
    {
      "id": 17733571770201895,
      "slug": "andrew-phillips-person",
      "name": "Andrew Phillips",
      "type": "person"
    },
    {
      "id": 17723038993766292,
      "slug": "san-diego-place",
      "name": "San Diego",
      "type": "place"
    },
    {
      "id": 17723038993835745,
      "slug": "credit-markets-topic",
      "name": "Credit Markets",
      "type": "topic"
    },
    {
      "id": 17723038993836717,
      "slug": "financial-regulation-topic",
      "name": "Financial Regulation",
      "type": "topic"
    },
    {
      "id": 17723038993836897,
      "slug": "fixed-income-topic",
      "name": "Fixed Income",
      "type": "topic"
    },
    {
      "id": 17723038993838852,
      "slug": "private-credit-topic",
      "name": "Private Credit",
      "type": "topic"
    }
  ]
}