Under the Microscope: A Closer Look at Regulators’ Life and Annuities Priorities

At the National Association of Insurance Commissioners’ (NAIC) 2026 Spring National Meeting, the Life Insurance and Annuities (A) Committee zoomed in on regulatory changes to protect consumers.

Illustrations

After the Life Insurance and Annuities Illustrations (A) Working Group dissected annuity illustrations, it reported its findings to the A Committee. The working group discovered that the use of high illustrated rates and the prominence of new proprietary indexes for which backcasted data is used were the cause of the high illustrated rates. It also found that the average length of the illustration is 21 pages, including a lot of fine print.

Commissioner Scott White questioned the complexity of the illustrations and what was driving the complexity. Ben Slutsker, chair of the working group, explained that the complexity is that “the products themselves are complex.” Slutsker explained that Model #245 includes requirements for annuities, but those requirements do not require complexity.

As a follow-up, the working group met on March 31, 2026, to discuss short- and long-term approaches to ensure consumers receive reasonable expectations from annuity illustrations and disclosures. Several commenters narrowed the focus to Model #245 and whether its illustration and disclosure requirements could be a useful starting point to address regulatory concerns for annuities.

Market Data and Scanning

As part of the NAIC’s 2026 Strategic Priorities to deepen its capabilities as a data aggregator, analytics provider, and early warning monitor, and to support more proactive regulatory oversight and risk identification, NAIC leadership assigned to the A Committee “a market data and scanning priority.” This also includes collaborating with the Market Regulation and Consumer Affairs (D) Committee to:

[C]ollect and analyze data on insurer compliance with sales and marketing requirements for life insurance and annuities, including exploring how technology can be employed to monitor advertising and the independent marketing organizations (IMOs) to identify marketing outliers.

Currently, the NAIC collects retrospective data to be used in market regulation efforts, including the Market Conduct Annual Statement (MCAS). MCAS annually collects summary market conduct data reported by individual insurance companies with a filing deadline of April 30 each year. The MCAS data is reported to individual states and subject to a 60-day data quality review, which results in a time lag of almost a year before the NAIC can meaningfully capture and review the data.

The NAIC currently has no means of collecting data on complaints involving illustrations. However, new specific illustration-related coding is being created within the NAIC’s Regulatory Information Retrieval System to capture adjudicated regulatory actions involving illustrations that are inadequate, misleading, or not provided when required.

At the Spring National Meeting, the A Committee also sharpened the lens focusing on how technology can be used more proactively for market regulation efforts. Specifically, the committee exposed a question asking:

Are there ways that technology can be used to improve market regulation (related to advertising, marketing and sales) for the benefit of consumers? In particular, are there ways that regulators can be more proactive rather than retrospective. For example:

• Are there tools to evaluate and compare projected accumulations in an
  annuity illustration at time of sale with subsequent actual performance? This
  could help identify which annuities significantly fail to meet projections or
  require an update to the illustration.
• Are there tools that could be used to monitor IMO compensation incentives?
• Are there efficient ways to monitor what consumers actually see?
• Are there ways to aggregate findings to provide early feedback to
  industry to encourage course correction
  in real time?
• Are there any other ideas or suggestions we should consider?

These exposure questions bring into view the A Committee’s emphasis on using technology to aid in market regulation, and life insurance and annuity providers should keep a close eye on potential changes that may emerge.

Annuity Buyer’s Guide

Since the NAIC buyer’s guides for deferred annuities were last updated in 2013, the A Committee’s Annuity Buyer’s Guide Working Group is focusing on reviewing and updating the guide in light of several evolutions in the annuity marketplace. The group exposed a draft update to the guide to reflect the introduction of registered index-linked annuities and multiyear guaranteed annuities, as well as Model #275’s new best interest standard.

At its meeting on April 20, 2026, the group discussed comments received on the draft revisions to the guide. Several commenters stressed the need for the revised guide to stay true to its intended purpose as a resource for consumers to understand annuity products and identify key questions to discuss with a financial professional. Commenters also highlighted that the guide should provide balanced information on annuity products, by including potential benefits as well as warnings and risks. The group instructed a regulator-only drafting group to consider the feedback received and create a second draft of the revised guide for further examination.