SAPWG exposed revisions to SSAP No. 52 at the Spring National Meeting on March 23, 2026, giving state regulators a line-item view of the funding agreement-backed notes life insurers use to raise institutional capital. Issuance hit a record $79.5 billion in 2025 across 26 issuers, up 36% from $58.5 billion, against outstanding balances near $220 billion. Until now regulators tracked that market through Federal Reserve data and rating agency reports rather than statutory filings.

Key Takeaways

  • Six structure types come into scope, from FABNs and commercial paper through repurchase agreements, loans, municipal prepay funding agreements and a catch-all category.
  • All balances must be reported before reinsurance, so the full liability is visible regardless of cession to affiliated or third-party reinsurers.
  • The puttable column captures funding agreements with an embedded option to withdraw at book value where the insurer has no contractual alternative to paying out, which is the liquidity measure.
  • $79.5 billion of 2025 issuance across 26 issuers, with January 2025 alone at $15.6 billion across 18 issuers, against outstanding balances of roughly $214.5 billion as of mid-2025 and a 14% decade CAGR.
  • A year-end 2026 effective date leaves roughly six months to build collection and reporting infrastructure for data that exists nowhere in current statutory filings.

What Goes Into Note 11D

The item traces to a February 17, 2026 referral from the Macroprudential (E) Working Group. NAIC staff classified it as a SAP clarification rather than a substantive change, which puts it on the faster adoption path, and SAPWG exposed Agenda Item 26-01 for comment through May 1, 2026.

The disclosures sit after paragraph 21 of SSAP No. 52 on deposit-type contracts, land in Note 11D of the statutory annual statement and carry a companion footnote on Exhibit 7. Staff added a collateral pledged component beyond what the Macroprudential Working Group originally asked for.

Six structures are covered. FABNs run a funding agreement into a bankruptcy-remote SPV that issues notes to institutional investors, and rating agencies treat the claim as roughly equivalent to an individual policyholder's, which is why the SPV prices tighter than the insurer's own unsecured debt. FABCP does the same at 360 days or less. FABRs add a bank repurchase agreement with collateral the bank may rehypothecate. FABLs, added after ACLI input following the November 2025 exposure, put the SPV on the bank's side. FABMBs back municipal tax-exempt bonds that prepay 20 to 30 years of energy delivery. A residual category catches the rest.

Each structure gets its own row across four columns:

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

The Puttable Column Is the Measurement That Was Missing

Column 2 is the one that changes what a regulator can compute.

It captures funding agreement balances containing a put or embedded option allowing the holder to withdraw at book value without a triggering event, where the insurer has no contractual alternative to paying out at book value. That is a demand-deposit-like liability sitting inside a life insurer's deposit-type contracts, and its size has never been separately reported.

With the balance disclosed, simultaneous exercise becomes modelable. The failure mode is the one that took down FABN issuers in 2007 and 2008: multiple institutional holders putting at once against assets that cannot be liquidated at book. Without the column, the stress test cannot be parameterized at all.

The maturity table does the complementary work. It requires the full profile of funding agreements backing SPV issuances split by fixed and floating rate, reported prior to execution of any interest rate swaps, so regulators see raw rate exposure before hedging, with zero-coupon agreements classified as fixed and the total reconciling to the aggregate FA balance.

That combination is what Moody's has identified as the actual risk: private credit assets backing these liabilities becoming distressed at the same time a large batch of notes matures. Correlation between the asset side and the maturity wall is the exposure, and it cannot be assessed from an aggregate balance. A $220 billion market with an unknown maturity distribution and an unknown puttable share supports no meaningful liquidity analysis; the same market with both disclosed supports a straightforward one.

The scale explains the urgency. Outstanding balances reached roughly $214.5 billion as of mid-2025 on a 14% compound annual growth rate over the prior decade, 2025 issuance set a record at $79.5 billion across 26 issuers, and January 2025 alone ran $15.6 billion across 18 issuers.

What the Disclosure Still Will Not Show

Pre-reinsurance reporting is the strongest design choice in the proposal, and it also marks the edge of what the filing reaches.

Reporting gross means the full liability appears regardless of how much has been ceded. But much of that cession runs to affiliated or third-party reinsurers domiciled offshore, beyond direct NAIC jurisdiction. The revision therefore measures the exposure precisely and the counterparty behind it not at all. A regulator reading Note 11D will know the size of the puttable book and not what stands behind the cession of it.

Two of the four dimensions also resolve to prose rather than figures. Where SPV issuance terms differ from the backing funding agreement terms, in principal, interest rate, maturity, rating or currency, the insurer supplies a narrative description of the differences, with municipal prepay structures exempt because their terms are designed to diverge. Currency works the same way: a breakout across AUD, CAD, CHF, EUR, GBP and other, followed by a statement on whether all foreign currency exposure is hedged and an explanation of the remainder if not.

The cross-currency exposure that provision targets is real and sizeable. Athene raised GBP 400 million, about $545 million, in ten-year sterling FABNs at 120 basis points over gilts, against GBP 1.25 billion of investor interest. None of that currency risk is visible in current statutory filings, and after year-end 2026 it will be visible as a table of balances plus a sentence.

The build is the immediate constraint. Roughly six months separates the exposure from a year-end 2026 effective date, for balances that must be assembled before reinsurance, split by structure, by put feature, by maturity bucket, by rate type and by currency, from systems that were never asked for any of it.

Further Reading

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