The National Association of Insurance Commissioners (NAIC) is targeting October to finalize a proposal restricting the public disclosure of insurers' risk-based capital (RBC) ratios, a key solvency metric.
The Capital Adequacy Task Force aims to curb publication and dissemination of these ratios across all media, including press releases, webcasts, and earnings presentations.
The proposal, first considered in April 2024 and already subjected to two public comment periods, would prohibit sharing RBC ratios beyond their original regulatory intent: to identify insurers potentially undercapitalized and needing oversight.
Task force chair Mike Yanacheak emphasized that RBC ratios were never designed to rank well-capitalized companies, but rather as a threshold tool for regulatory attention.
Supporters argue RBC ratios have limited use and ranking insurers by them is inappropriate. On the other hand, critics, including consumer advocates and trade groups like the American Academy of Actuaries, warn that restricting disclosure reduces transparency and harms stakeholders like policyholders and investors.
Efforts at NAIC are ongoing to refine capital adequacy frameworks and risk evaluations. These reforms aim to strengthen regulatory oversight while balancing transparency and the practical utility of RBC metrics in today's complex insurance markets.
