The proposal was previously exposed by the Macroprudential Working Group in November 2025 and is intended to provide regulators with information to monitor the activity in the FABN market, as the statutory Annual Statement reporting framework currently does not require reporting with respect to FABNs. The proposal is the result of discussions by the Macroprudential Working Group in July 2025 during which the working group heard a presentation from NAIC staff on FABN and FABS programs. While NAIC staff noted that they do not believe FABN/FABS activity poses any outsized risk for individual insurers or the industry in general, state regulators stated that they would like to receive reporting from insurers to identify aggregate issuance and outstanding FABNs/FABSs and the types of FABNs/FABSs issued rather than relying on information currently received from the Financial Stability Oversight Council and the Federal Reserve Board. The Financial Stability Oversight Council and the Federal Reserve Board have quantified and highlighted this activity in their most recent reports on financial stability.
The additional time to provide comments was requested by the American Council of Life Insurers (ACLI) to allow the ACLI an opportunity to offer further context in its comment letter. In discussing its request for re-exposure, the ACLI noted that it would like additional time to develop a comprehensive response that reflects the full range of funding agreement uses beyond FABNs, including funding agreement-backed repurchase agreements (FABRs), funding agreement-backed commercial paper (FABCP), funding agreement-backed loans (FABLs), and direct funding agreements. The Macroprudential Working Group noted that the intent of the proposal has always been to capture all funding agreements backing FABNs but that the exposure does not request separate reporting for each type of FABN. The Macroprudential Working Group noted that funding agreements backing FABLs are not currently included in the exposure and the Macroprudential Working Group will conduct additional research to determine whether FABLs should be classified as a type of FABN.
If the Financial Stability Task Force adopts the proposal, a referral will be sent to the Statutory Accounting Principles (E) Working Group (SAP Working Group) to incorporate a new disclosure in SSAP No. 52, Deposit-Type Contracts, and the Financial Stability Task Force chair will sponsor a proposal to incorporate new footnote disclosures to Exhibit 7, Deposit-Type Contracts. The Macroprudential Working Group expects that the proposal will be adopted for disclosure in the year-end 2026 financial statements.