Life Insurance: Regulatory Recap

Research evidence excerpt

Life Insurance: Regulatory Recap

Equity Research

Industry Update — June 18, 2026

Life Insurance

As Easy as "RBC"...a Positive NAIC Outcome

Our Call Wes Carmichael, CFA

Two NAIC task force groups met today and adopted new language for the Preamble to Equity Analyst | Wells Fargo Securities, LLC

Wesley.C.Carmichael@wellsfargo.com | 212-214-5335

RBC for the US insurance industry (Life/Health/P&C). We view the outcome as positive, as

the changes do not introduce incremental disclosure burden.

Positive #1: No RBC disclosure prohibition. Over the past couple years, there had been

some discussion at the regulatory level around prohibiting companies from disclosing and

discussing RBC ratios with investors/analysts in earnings releases and conference calls.

The adopted version of the Preamble (effective YE'26) does not include any prohibition.

In our opinion, prohibition would have been a very bad outcome for public LifeCos, which

already face criticism of complexity/lack of transparency.

Positive #2: No incremental disclosure needed when disclosing RBC. Earlier draft

language suggested RBC disclosures “should be accompanied by a disclosure statement.”

This language has been removed in today's adopted language. We interpret the adopted

Preamble as leaving RBC-related disclosure practices largely unchanged relative to

today rather than incrementally burdensome.

RBC is not intended as a cross-company comparison tool. The Preamble reiterates

that comparing RBC ratios across companies may not be meaningful. Notably, language

suggesting that a 600% RBC ratio is not necessarily stronger than 400% was removed. In

our view, RBC is best assessed relative to company-specific targets, which can vary for

valid reasons across the industry.

Background on the Preamble.