- Key insight: The trade group representing state insurance commissioners has rejected calls for federal guardrails, arguing that states are actively conducting oversight.
- What's at stake: State regulators have adopted new guidelines to stress-test whether complex private assets and offshore reinsurance deals can support policyholder liabilities, according to the trade group.
- Expert quote: "The NAIC is not aware of any material instance of a private firm engaging in risky investments with policyholder premiums and failing to disclose or misclassifying those investments." —Scott White, Virginia's insurance commissioner and the NAIC's president
The National Association of Insurance Commissioners, facing pressure from Sen. Elizabeth Warren amid a federal probe of Los Angeles Dodgers owner Mark Walter and two life insurers he owns, and is pushing back against calls for heightened federal oversight of life insurers that are state-regulated.
The NAIC
Warren specifically asked about two insurers — Delaware Life and Clear Spring Life and Annuity — that are owned by Guggenheim Partners, Walters' private equity firm. Those insurers are the subject of federal probes, according to the Wall Street Journal. The state insurance commissioners decline to provide information to Warren about Delaware Life and Clear Spring Life.
A major issue in private-equity ownership of insurers is the potential for self-dealing, inflated management fees and conflicts of interest. Warren asked for responses to more than a dozen questions, including whether any insurers are using policyholder premiums for risky investments and whether any have failed to disclose, or misclassified, their investments.
"To date, the NAIC is not aware of any material instance of a private firm engaging in risky investments with policyholder premiums and failing to disclose or misclassifying those investments," according to the letter signed by Scott White, Virginia's insurance commissioner and the NAIC's president, and Elizabeth Kelleher Dwyer, director of Rhode Island's Department of Business Regulation, who is the NAIC's president-elect. The letter was also signed by two other NAIC officers: Jon Pike, Utah's insurance commissioner, and Michael Wise, director of South Carolina's Department of Insurance.
Warren was looking for more information on Walter. He originally reported that just 3% of his company's assets were affiliated with his firm's two insurers, but that amount was later changed to 42%, which prompted the federal probes, Warren said.
To be clear, state insurance laws explicitly require life insurers to maintain reserves that are adequate to cover all estimated unpaid losses and claims. New York, for example, mandates that insurers maintain reserves in an amount sufficient to provide for the payment of all losses and claims for which the insurer may be liable.
The NAIC said insurance regulation has evolved alongside changes in ownership and investment strategies.
"Regulators have regularly updated capital requirements, reporting standards, supervisory tools, and analytical capabilities to address emerging risks while maintaining a consistent focus on insurer solvency and policyholder protection," the letter to Warren stated. Moreover, the continuing modernization of these tools does not reflect an insurance regulatory vacuum requiring enhanced federal guardrails; rather, it reflects the state-based system performing its longstanding function of adapting prudential standards as markets evolve."
The NAIC sought to put the ownership of life insurers by private-equity firms into context. The NAIC said insurers were forced to hunt for higher returns due to ultra-low interest rates prior to 2022. When interest rates were very low, many insurers began investing in high-risk private assets with complex structures in search of yield, the NAIC said.
The NAIC listed a slew of changes it has made recently, including adopting a principles-based bond definition in 2025 to ensure that assets are classified based on their underlying cash flows and credit enhancement. The group also has cracked down on residual tranches and private letter credit ratings that seek to bypass direct NAIC review. The group
The NAIC also detailed changes to actuarial guidelines to evaluate whether complex, high-yielding assets can actually deliver required cash flows during market distress. It said that it has tried to police the burgeoning market for asset-intensive reinsurance.
Still, a growing trend has seen U.S. insurers cede billions in annuities and life policies to offshore affiliates or captive reinsurers operating in jurisdictions with lower capital requirements. State insurance regulators are now required to evaluate those situations to ensure reserves and supporting capital are sufficient after business has been transferred out of the U.S.
State insurance regulators are considering adopting additional guidance for year-end 2026 filings to require deeper disclosures on reserve calculations, supporting assets, and drivers of reserve reductions. Starting with year-end 2026, insurers also must report private investments under a standardized dataset.
