On September 10, 2026, Senator Elizabeth Warren, ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, sent a letter to the National Association of Insurance Commissioners (NAIC) that included an extensive list of questions targeted toward assessing state insurance regulators’ efforts to address risks arising from the growing ties between private investment firms and insurance companies. The stated goal of the letter was to obtain information to assess what actions both state and federal regulators must take to ensure that American families are protected. On September 24, 2026, the NAIC responded with a comprehensive 22-page letter defending the state-based regulatory framework and surveying the various efforts underway to strengthen oversight of complex investments and asset structures.
Senator Warren’s letter was prompted, in part, by recent reports that TWG Global, a private investment firm, has received inquiries from the Department of Justice and the Securities and Exchange Commission after two life insurers it owns — Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. — allegedly misclassified approximately $21 billion in affiliated investments as independent. In her letter, Senator Warren highlighted the significant growth of private credit investments by life insurance companies, raising concerns about resiliency, illiquidity, and the ability of these insurers to meet policyholder claims during periods of financial stress. The letter then posed numerous questions spanning topics from the NAIC’s response to the misclassifications of affiliation and the NAIC’s general efforts to oversee the role of private investment in the insurance industry to the adequacy of the filing-exempt process, transparency of insurer investments, pension risk transfer exposure, and the level of engagement with federal regulators on these topics. Notably, one of the questions asked is whether the NAIC intends to increase transparency of its rulemaking process.
The NAIC’s response acknowledged the macroeconomic forces — particularly the prolonged low-interest-rate environment — that have driven life insurers toward higher-yielding investments due to the need for sufficient investment returns to support the long-term obligations that life insurers write. However, the letter firmly defended the existing state insurance regulatory framework, detailing a series of reforms adopted since 2022, which was when the NAIC last briefed the Senate Banking Committee on some of the issues cited in Senator Warren’s letter. These reforms include:
- Development of a principles-based bond definition designed to classify investments by economic substance rather than legal form
- Development of new actuarial guidelines — AG 53 and AG 55 — that mandate testing whether complex assets can adequately support life insurers’ liabilities and reinsurers’ obligations under reinsurance protection used by life insurers
- Enhanced reporting of private investments and related-party and affiliate transactions
- Enhanced oversight of affiliated investment management arrangements
- Overall review of the risk-based capital framework as well as certain specific adjustments under the existing framework (e.g., a 45% risk-based capital charge on residual interests in structured securities)
This exchange reveals a notable tension with Senator Warren’s letter questioning whether state-based insurance regulation is keeping pace with the scale and complexity of activity by private investment firms in the insurance sector, suggesting that “enhanced federal or state guardrails” may be needed. The NAIC pushed back directly, characterizing its ongoing modernization of supervisory tools as evidence that “the state-based system [is] performing its longstanding function of adapting prudential standards as markets evolve,” rather than proof of “an insurance regulatory vacuum requiring enhanced federal guardrails.” Both sides agree that the involvement of private equity and credit in the insurance industry warrants close attention, but they differ on whether the current state-based insurance regulatory architecture is adequate or whether some sort of federal intervention, such as the reinvigoration of the Financial Stability Oversight Council, is on the horizon. Even if federal intervention regarding these issues is not forthcoming, this exchange could prompt the NAIC to expand its efforts to address the role of private equity and credit in insurance, including efforts that are not solely focused on life insurance.