The International Association of Insurance Supervisors (IAIS) has set a 2026–2027 roadmap focused on structural shifts in life insurance. Supervisors are expected to scrutinise increased use of asset‑intensive reinsurance and higher allocations to alternative assets, while also advancing guidance on climate risk, natural catastrophe protection gaps, digital innovation and cyber risk.
The IAIS is consulting on revised application papers on recovery and resolution following the adoption of updated Insurance Core Principles and the Common Framework for the Supervision of Internationally Active Insurance Groups, according to a Fitch Ratings note.
The European Insurance and Occupational Pensions Authority (EIOPA) has published a first package of guidelines and draft technical standards for the Insurance Recovery and Resolution Directive (IRRD), due to apply from end of January 2027. The focus is on pre‑emptive recovery plans, resolution planning and resolvability assessments, with minimum market coverage thresholds for firms required to have recovery or resolution plans. Tools such as liability write‑down and conversion, solvent run‑off and portfolio transfers are intended to facilitate orderly resolution, rather than change capital structures fundamentally.
EIOPA has also updated guidelines on the supervisory review process and on market and counterparty risk in light of the Solvency II review, adding more emphasis on sustainability, IT and cyber risk. Consultations are under way on how to recognise climate adaptation measures in natural catastrophe capital charges and on the supervision of insurers owned by private equity, given their often higher exposure to illiquid assets and reinsurance.
In the UK, the Prudential Regulation Authority (PRA) has finalised policies on operational resilience, climate‑related risk management and the Matching Adjustment Investment Accelerator. The 2025 life insurance stress test showed the sector remained well capitalised under a severe market shock, with solvency ratios falling but staying comfortably above regulatory requirements.
Fitch said the PRA is now preparing a dedicated FundedRe policy and a system‑wide exploratory scenario on private market exposures, signalling closer scrutiny of funded reinsurance and private credit interlinkages as their use grows.
The US National Association of Insurance Commissioners (NAIC) is tightening the risk-based capital (RBC) treatment of complex assets held by life insurers, focusing on collateralised loan obligations (CLOs), Schedule BA mortgages and collateral loans.
The aim is to close perceived arbitrage in structured credit, private assets and alternatives, but the changes are likely to increase capital volatility for carriers with heavier exposure to these asset classes.
According to a report from Fitch Ratings, implementation of the NAIC's CLO modelling project has been pushed back again to Dec. 31, 2026, to allow further refinement of the methodology and better alignment with broader work on asset-backed securities and the RBC framework. A revised approach from the American Academy of Actuaries introduces tranche‑thickness as a key driver, splitting factors at Baa3/equivalent for tranches of 4% thickness or less versus thicker slices, in response to differences in rating agency methodology.
The NAIC is also progressing its Aggregation Method (AM) for group capital, with a draft review of US group solvency regulation out for consultation until May 11.
The NAIC's Autumn 2025 and Spring 2026 meetings moved several investment-focused RBC changes towards targeted implementation at year-end 2026 or 2027. Proposals include revised CLO capital factors, updated treatment for Schedule BA mortgages, a more structured regime for private letter ratings and a look-through model for collateral loans that links capital charges to the nature of the underlying collateral.
Under one proposal, collateral loans backed by equity interests could attract a 30% RBC charge, up from the current 6.8%, Fitch said.
Beyond the US, reforms and proposals in Colombia's pension system, including a sharp minimum wage increase and potential limits on foreign investments for pension fund administrators, are creating asset-liability management and diversification challenges for life insurers and annuity writers.
In Bermuda, the Monetary Authority is consulting on a new parametric special purpose insurance class to expand capacity for climate-related and emerging risks. Recent stress‑testing results indicate the Bermuda non‑life market remains resilient to severe catastrophe and market shocks, despite rising gross and net catastrophe exposures.
Across Asia‑Pacific, regulators are adjusting capital, accounting and product rules to support investment and affordability while maintaining prudential standards. In Australia, the Australian Prudential Regulation Authority has finalised capital changes for longevity products, effective July 2026, and completed a climate vulnerability stress test that points to a widening home insurance protection gap as premiums rise with higher climate‑related losses and construction costs.
Hong Kong’s Insurance Authority is consulting on refinements to its risk‑based capital regime, including preferential treatment for qualifying infrastructure investments and technical changes for catastrophe risk, indexed universal life and crypto assets. Taiwan’s Financial Supervisory Commission is reshaping foreign‑exchange reserve and accounting frameworks for life insurers to smooth reported earnings volatility from FX movements, though underlying currency risk remains and could rise if hedging is reduced.
Elsewhere, Thailand is rolling out its fifth Insurance Development Plan, positioning insurance as a national “risk buffer” and pushing more data‑driven supervision. South Korea is introducing a minimum core capital ratio from 2027 under the Korea Insurance Capital Standard to strengthen capital quality.
Across the region, new rules on insurance‑linked securities, alternative reinsurance and capital instruments are deepening connections between domestic insurance markets and global capital pools, creating both fresh capacity and added complexity for cross‑border groups.
Taken together, these initiatives point to more granular capital treatment of complex assets and more integrated group-level supervision, especially for groups relying heavily on asset-intensive reinsurance, funding agreement programmes and offshore vehicles.
