NAIC Capital Adequacy (E) Task Force Adopts Changes to Life Risk-Based Capital Factors for 2026 and 2027

The NAIC Capital Adequacy (E) Task Force (CAD TF) met on June 30, 2026, and adopted the following changes to risk-based capital (RBC) factors for life insurers that had been recommended by its working groups:

• Effective December 31, 2026, new RBC factors for collateralized loan obligations (CLOs), collateralized bond obligations (CBOs) and collateralized debt obligations (CDOs)
  • For details, see our June 23 article The NAIC RBC Investment Risk and Analysis (E) Working Group Has Made Its Decision on New Life RBC Factors for CLOs
  • The final version that the CAD TF adopted is Attachment Nine to the CAD TF meeting materials

• Effective December 31, 2026, a “look-through” RBC factor of 0.68% for Schedule BA funds that invest in residential mortgage loans in good standing (now extended to include funds that are unaffiliated with the insurer, having previously only applied to affiliated funds)
  • For details, see our May 11 article NAIC Working Group Adopts 0.68% “Look-Through” RBC Factor for Funds Investing in Resi Mortgages
  • The final version that the CAD TF adopted is Attachment Eight to the CAD TF meeting materials

• Effective December 31, 2027, new RBC factors for (i) collateral loans backed by interests in joint ventures, partnerships and limited liability companies and (ii) collateral loans backed by residual interests
  • For details, see our May 5 article Life Risk-Based Capital (E) Working Group Continues to Discuss RBC Treatment of Collateral Loans and note that the Life Risk-Based Capital (E) Working Group and the CAD TF decided to adopt Option 2
  • The final version that the CAD TF adopted is Attachment Eleven to the CAD TF meeting materials