From tracking SAPWG proposals across five consecutive NAIC meetings, the SSAP No. 52 revision exposed on March 23, 2026 stands apart in both scope and urgency. For the first time, state regulators will have a standardized, line-item view of the funding agreement-backed notes (FABNs) and related structures that life insurers, particularly PE-backed carriers, use to raise institutional capital. The revision covers six distinct structure types, mandates pre-reinsurance reporting, and requires maturity distribution, embedded option, currency denomination, and hedging disclosures that currently exist nowhere in statutory filings.

The timing is deliberate. FABN issuance hit a record $79.5 billion in 2025 across 26 issuers, up 36% from $58.5 billion in 2024 (Fitch Ratings). Outstanding balances have reached approximately $220 billion. Yet until now, state regulators had no direct mechanism to track this activity at the insurer level; they relied on Federal Reserve data and rating agency reports. The SSAP 52 revisions close that gap with a year-end 2026 effective date, giving carriers roughly six months to build the data collection and reporting infrastructure.

What SAPWG Proposed: Anatomy of the SSAP 52 Revisions

The proposal traces to a February 17, 2026 referral from the Macroprudential (E) Working Group to SAPWG. Staff review, completed by Julie Gann, classified the item as a SAP clarification rather than a substantive change, which allows for a faster adoption path. On March 23, at the Spring National Meeting in San Diego, SAPWG moved Agenda Item 26-01 to the active listing and exposed the proposed revisions for public comment through May 1, 2026.

The new disclosures are inserted after paragraph 21 of SSAP No. 52 (Deposit-Type Contracts) and placed in Note 11D of the statutory annual statement, alongside a companion footnote on Exhibit 7 (Deposit-Type Contracts). NAIC staff also added a collateral pledged component, extending beyond what the Macroprudential Working Group originally recommended.

The central mandate: all funding agreement balances supporting SPV issuances must be reported before reinsurance. This is a significant design choice. Pre-reinsurance reporting ensures that the full liability exposure is visible regardless of how much risk the carrier has ceded to affiliated or third-party reinsurers, many of which are offshore entities beyond direct NAIC jurisdiction.

Six Funding Agreement Structures Under Scope

The proposal captures every major variant of the institutional funding channel that life insurers use to raise capital through SPV structures. Each structure type receives its own row in the disclosure table:

Funding Agreement-Backed Notes (FABNs): The most common structure. The insurer issues a funding agreement to a bankruptcy-remote SPV, which then issues notes or bonds to institutional investors: pension funds, insurance company portfolios, corporate treasuries, and sovereign wealth funds. Investors receive principal and interest from the SPV, funded by the insurer's FA payments. Rating agencies treat FABNs as having a claim roughly equivalent to an individual policyholder, which allows the SPV to issue at tighter spreads than the insurer could achieve through unsecured corporate debt.

Funding Agreement-Backed Commercial Paper (FABCP): A short-duration variant where the SPV issues commercial paper with maturities of 360 days or less, backed by a master funding agreement from the insurer. These programs provide rolling short-term institutional funding.

Funding Agreement-Backed Repurchase Agreements (FABRs): The SPV purchases a funding agreement from the insurer, then enters a repurchase agreement with a bank counterparty. The insurer pledges collateral to the bank, which may rehypothecate it. This structure adds a layer of counterparty complexity that regulators want to track.

Funding Agreement-Backed Loans (FABLs): Similar to FABNs in economic substance, but the SPV is established by the bank counterparty rather than the insurer, and the SPV enters a loan directly with the bank. The insurer pledges securities to a collateral account. FABLs were not part of the initial November 2025 exposure; they were added after ACLI input and further NAIC research.

Funding Agreements Issued into Municipal Prepay Structures (FABMBs): Municipalities issue tax-exempt bonds and use the proceeds to prepay 20 to 30 years of energy delivery. The insurer's funding agreement provides the interest payments backing the bonds. These carry unique structural features because the FA terms are designed to differ from the bond terms.

Other Funding Agreements Backing SPV Issuances: A catch-all category ensuring no variant escapes the disclosure net.

What Carriers Must Report: Four Disclosure Dimensions

For each of the six structure types, insurers must populate a four-column disclosure table:

Column Metric Description
1 Total Amount Aggregate balance of funding agreements supporting each structure type, reported before reinsurance
2 Amount Puttable FA balances containing a put feature or embedded option allowing the holder to withdraw at book value without a specific triggering event, where the insurer has no contractual alternative to paying out at book value
3 Amount with Different Terms FA balances where SPV issuance terms differ from the backing FA terms (principal, interest rate, maturity, rating, or currency)
4 BACV of Collateral Pledged Book adjusted carrying value of collateral pledged by the reporting entity to secure the structure

Column 2, the "puttable" disclosure, is the most consequential for liquidity risk monitoring. Funding agreements with unconditional put features create demand-deposit-like liabilities on the insurer's balance sheet. If a significant portion of the FA portfolio is puttable, regulators can model stress scenarios where multiple investors exercise simultaneously, creating a liquidity drain analogous to the mass redemptions that destabilized FABN issuers during the 2007-2008 financial crisis.

Where SPV issuance terms differ from the backing FA terms (Column 3), the insurer must provide a narrative description identifying the specific differences. This catches structures where the SPV issues floating-rate notes backed by fixed-rate FAs, or where maturity dates do not align. Municipal prepay structures are exempt from this narrative, since their terms are structurally designed to diverge.

Maturity Distribution by Rate Type

A second disclosure table requires the full maturity profile of funding agreements backing SPV issuances, broken out by fixed versus floating rate:

Maturity Bucket Fixed Rate Floating Rate Total
1 year or less
After 1 year through 5 years
After 5 years through 10 years
After 10 year through 20 years
Over 20 years

Rates are reported prior to execution of any interest rate swaps, giving regulators the raw rate exposure before hedging. Zero-coupon funding agreements are classified in the fixed rate column. The total must reconcile to the aggregate FA balance backing SPV issuances.

This maturity data fills a critical gap. Moody's has flagged the primary risk in FABN markets as scenarios where "private credit assets backing these liabilities become distressed at the same time a large batch of the notes mature." Without maturity distribution data, regulators cannot assess concentration risk in specific time horizons.

Currency Denomination and Hedging Disclosure

The proposal requires a currency breakout of all FA balances, with specific columns for AUD, CAD, CHF, EUR, GBP, and Other. Insurers must disclose the year-end FA balance in U.S. dollars and the amount denominated in each foreign currency.

Critically, the disclosure requires a statement on whether all foreign currency exposure is hedged via derivatives, asset matching, or otherwise mitigated. If not fully hedged, the insurer must explain the remaining exposure. This targets the cross-currency FABN structures that PE-backed carriers use to access international institutional investors. Athene, for example, raised GBP 400 million ($545 million) in 10-year sterling FABNs at 120 basis points over gilts, drawing GBP 1.25 billion in investor interest (Bloomberg Law). Multi-currency issuance programs create currency risk that is not visible in current statutory filings.

The $220 Billion Market Regulators Are Opening Up

The scale of the FABN market explains why regulators moved when they did. Growth has been rapid and concentrated:

  • Outstanding balances: Approximately $214.5 billion as of mid-2025, reflecting a 14% compound annual growth rate over the prior decade (Fitch Ratings, S&P Global)
  • 2025 issuance: $79.5 billion across 26 issuers, a record that exceeded the previous high by 36% (Fitch Ratings, February 2026)
  • January 2025 alone: Over $15.6 billion across 18 issuers, the strongest monthly start on record (Fitch Ratings)
  • 2024 issuance: $58.5 billion (Fitch Ratings)

The economics are straightforward. A funding agreement functions like a fixed annuity: coupon, fixed duration, principal back at maturity. As TD Securities described it, the FA "looks and feels like a fixed annuity" (GlobalCapital). The insurer earns the spread between the FABN's cost of funds and the yield on invested assets. Because rating agencies treat FA obligations as senior claims roughly equivalent to individual policyholder obligations, the SPV can issue notes at investment-grade spreads, making FABNs cheaper than unsecured corporate debt for most issuers. Apollo's CFO has characterized FABNs as "really cheap financing" (Transacted.io).

Post-2008 structural reforms have eliminated some of the worst risks from the pre-crisis era. Modern FABNs typically feature fixed 3-to-5-year terms, removing the demand-deposit-like redemption features that caused liquidity spirals in 2007-2008. But the sheer growth in volume, the concentration among a handful of PE-backed issuers, and the reliance on private credit assets to generate the spread have drawn renewed regulatory attention.

Which Carriers Face the Biggest Reporting Burden

The disclosure requirements land most heavily on PE-backed life insurers that have built their business models around spread-based institutional funding:

Athene (Apollo Global Management) is the largest FABN issuer by a wide margin. Outstanding funding agreements reached approximately $64 billion as of June 2025, nearly double the $34 billion from a year earlier (Transacted.io). Athene issued $11.2 billion in FABNs in 2024 alone. Funding agreements represented 21% of net reserve liabilities in Q1 2025 (Reuters Breakingviews). No carrier has more infrastructure to build, and none has more at stake in how the disclosures are interpreted by rating agencies and regulators.

New York Life is the second-largest issuer at approximately $10 billion in outstanding FA balances, a reminder that the FABN channel is not exclusive to PE-backed carriers (Transacted.io). MetLife and Pacific Life maintain active issuance programs. Global Atlantic (KKR) and American National (Brookfield) have expanded their FABN programs as their PE parents scale the spread-based model. Lincoln National debuted its first FABN offering in early 2025 (Bloomberg Intelligence).

Cumulatively, Apollo-affiliated and rival insurers have sold $191 billion in FABNs (Reuters Breakingviews, June 2025). The new disclosures will reveal, for the first time in statutory filings, how concentrated this activity is and how dependent each carrier's funding strategy has become on the institutional channel.

Regulatory Timeline: Eighteen Months From Concept to Compliance

The SSAP 52 revision moved through the NAIC committee structure faster than most proposals of comparable scope. Patterns we have seen in recent NAIC meetings suggest this pace reflects the Macroprudential Working Group's prioritization of PE-backed insurer transparency:

Date Milestone
July 2025NAIC staff presented FABN/FABS market overview to Macroprudential (E) Working Group
November 7, 2025Macroprudential Working Group chair established objective for insurer-level statutory reporting
November 2025Initial exposure of blanks proposal for public comment
December 8-11, 2025Fall National Meeting: Macroprudential Working Group and Financial Stability Task Force joint discussion
January 24-26, 2026Extended comment period deadline (ACLI requested 45-day extension, granted)
February 17, 2026Formal referral from Macroprudential (E) Working Group to SAPWG
March 23, 2026SAPWG exposed SSAP 52 revisions at Spring National Meeting in San Diego
April 28, 2026Blanks (E) Working Group comment period closed
May 1, 2026SAPWG comment period closed
Year-end 2026Target effective date for first statutory filings under new disclosures

The ACLI's involvement is worth noting. The trade group initially requested the 45-day comment period extension, which was granted, but then pushed for broader scope. The ACLI advocated expanding the disclosure beyond FABNs alone to include FABRs, FABCP, FABLs, and direct FAs. This request was largely incorporated into the final proposal. The strategic logic: if disclosure is coming regardless, a uniform framework across all structure types prevents cherry-picking between disclosed and undisclosed channels.

NAIC staff struck a measured tone in their assessment, stating they "do not believe FABN/FABS activity poses any outsized risk for individual insurers or the industry in general" (Sidley Austin). But the Macroprudential Working Group wanted direct reporting capability rather than continued reliance on Federal Reserve data and third-party reports.

Connection to the Broader PE-Backed Insurer Scrutiny Campaign

The SSAP 52 revision does not stand alone. It is one node in an interconnected regulatory campaign targeting the opacity of PE-backed life insurer balance sheets. This continues a trend we have tracked since the NAIC first established the Macroprudential Initiative in the post-pandemic period:

CLO capital charges: The American Academy of Actuaries developed C-1 factors ranging from 0.03% to 2.73% for investment-grade CLO tranches and 12.59% to 70.82% for below-investment-grade tranches. The comment period was extended to April 17, 2026, with implementation now expected in 2027. CLOs are a core component of the invested asset portfolios that generate the spread behind FABN funding.

Private credit oversight: NAIC commissioners met Treasury Secretary Bessent on May 7, 2026 to address nearly $1 trillion in life insurer private credit exposure. The NAIC restructured into four specialized working groups, introduced private letter rating challenge authority, and imposed new reporting requirements including PIK interest disclosure.

Credit rating oversight: The new Credit Rating Provider Working Group is implementing a due diligence framework requiring private rating letter rationale reports within 90 days of rating actions, addressing concerns about rating inflation for structured assets held by PE-backed carriers.

AG 55 reinsurance collectability: Adopted in August 2025, Actuarial Guideline 55 requires collectability analysis for asset-intensive reinsurance, with enhanced scrutiny of the offshore structures that many PE-backed carriers use to optimize capital.

Investment subsidiary RBC elimination: The April 2026 exposure deletes the investment subsidiary category from RBC blanks entirely, closing a capital structure that some carriers used to reduce look-through charges on complex assets.

The connecting thread: each initiative strips away a layer of opacity from the PE-backed life insurer model. CLO factors address asset risk charges. Private credit oversight addresses rating reliability. AG 55 addresses offshore reinsurance. And the SSAP 52 FABN disclosure addresses the liability-side funding channel. Together, they construct a regulatory picture of the full balance sheet that did not previously exist in statutory filings.

Implementation Burden: Six Months to Build the Reporting Pipeline

The year-end 2026 effective date gives carriers approximately six months from the close of the comment period to build reporting infrastructure. For large issuers, this is a meaningful data engineering challenge:

  • Data aggregation across six structure types: Many carriers track FABNs in their capital markets or treasury systems, but FABRs, FABLs, and muni prepay structures may sit in different systems with different data schemas. Consolidating all six types into a single disclosure framework requires mapping data flows across multiple internal platforms.
  • Pre-reinsurance reconstruction: Carriers that cede a portion of their FA liabilities through reinsurance treaties must reconstruct the gross position. For carriers with complex intercompany reinsurance arrangements, particularly those involving affiliated offshore reinsurers, isolating the pre-reinsurance balance requires treaty-by-treaty analysis.
  • Maturity and rate-type disaggregation: Splitting the portfolio into five maturity buckets by fixed versus floating rate, prior to swap execution, may require pulling data from investment accounting systems that typically report post-hedge positions.
  • Currency denomination and hedging documentation: Multi-currency programs require reconciling FA balances denominated in six specified currencies, then documenting whether each currency exposure is fully hedged and by what mechanism.
  • Put feature identification: Identifying which FAs contain unconditional put features or embedded options requires contract-by-contract review of FA documentation, not just portfolio-level data.

Carriers with smaller FABN programs, a handful of vanilla fixed-rate structures in U.S. dollars, face a lighter lift. But for Athene, Global Atlantic, and other large PE-backed issuers running multi-currency programs across all six structure types, the implementation timeline is compressed relative to the data complexity.

Why This Matters for Actuaries

Valuation actuaries performing asset adequacy testing under Actuarial Standard of Practice (ASOP) No. 22 will now have statutory-filing-level visibility into the funding agreement liabilities backing invested asset portfolios. Pre-reinsurance FABN data changes the cash flow projection for asset adequacy analysis by revealing the gross liability that must be supported, regardless of reinsurance credit taken on the balance sheet.

Pricing actuaries in the spread-based annuity and institutional markets will see, for the first time in a standardized format, how their carrier's funding cost structure compares to peers. The maturity distribution and rate-type breakout provide inputs for asset-liability management models that previously relied on internal data alone.

Appointed actuaries issuing reserve opinions will need to consider the FABN disclosure data in their assessment of funding agreement liabilities under SSAP No. 52. The put-feature disclosure, in particular, bears on liquidity risk assessments and worst-case reserve adequacy scenarios.

Capital modeling actuaries should recognize the interaction between the FABN disclosure and the concurrent CLO factor recalibration, private credit reporting changes, and investment subsidiary RBC elimination. The combined effect shapes the total statutory capital picture for carriers that rely on spread-based institutional funding.

For the broader market, the disclosures will create a new dataset for comparative analysis. Once year-end 2026 statutory filings are public, analysts and regulators will be able to compare FABN concentrations, maturity profiles, and currency exposures across carriers for the first time. That transparency alone may influence how rating agencies assess institutional funding dependency and how reinsurers price treaties involving FA-backed liabilities.

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