NAIC Spring 2026 Meeting Update: The Property and Casualty Risk-Based Capital (E) Working Group and the Catastrophe Risk (E) Subgroup

Summary and Takeaways

• The working group and catastrophe subgroup advanced multiple Risk Based Capital (RBC) initiatives, including separating hurricane and earthquake PR100 experience, adding wildfire to the RBC Catastrophe Risk Charge (Rcat) with detailed PR027/PR027C instructions, and simplifying PR027INT convective storm questions, while also taking input on Securities Valuation Office (SVO)-funded RBC alignment, climate/flood considerations, and severe convective storm analysis.
• Cross-form health RBC changes were exposed to better align Accident & Health (A&H) underwriting risk with Health RBC, and an Academy report on premium/loss concentration factors recommended higher Maximum Diversification Credits that generally lower reserve and premium risk charges and Authorized Control Level (ACL), especially for larger and more diversified companies.

The Property and Casualty Risk-Based Capital Working Group and the Catastrophe Risk Subgroup met March 23, 2026 for the Spring Meeting. The agenda included actions on catastrophe risk proposals, exposure of a PR027INT modification, severe convective storms impact updates, climate disclosures, flood peril discussion, a Health RBC update on A&H underwriting risk structure, P/C RBC concentration factors, and an Academy research update. 

For proposal 2025-19-CR, Separate Earthquake and Hurricane PR100s, the subgroup exposed separating hurricane and earthquake loss experience in PR100s to align with other perils and improve risk management focus in the meeting materials. The formal proposal’s purpose is to differentiate hurricane and earthquake losses in P/C RBC blanks, mirroring wildfire and severe convective storms treatment. 

For proposal 2025-20-CR, Wildfire Rcat Implementation, the catastrophe risk subgroup ran a new wildfire model evaluation per ASOP No. 38 with RMS, Verisk, KCC-CoreLogic, finding increasing model consistency, and it exposed adding wildfire peril to Rcat. The PR027 instructions add wildfire to Rcat, specify approved vendor and own-model permissions, data requirements at selected return periods, and contingent credit risk treatment. Wildfire PR027C details input fields, factors, AEP/OEP reporting, and an exemption disclosure alternative for qualifying companies. Total Rcat combines earthquakes, hurricanes, and wildfires by square root of sums of squares, with convective storms shown informationally. 

For proposal 2026-08-CR: PR027INT Item D Modification, the subgroup proposed eliminating PR027INT questions D13–D14 on convective-storm-prone areas due to lack of clear definitions, to reduce ambiguity in the meeting materials. PR027INT outlines exemptions criteria for earthquake, hurricane, wildfire, and convective storm risk charges and filing implications. 

For the Health RBC Update: A&H Underwriting Risk Structure Change (2025-15-CA-MOD) A cross-form proposal updates XR013, XR014, PR019, PR020, PR022, PR025, LR019, and LR020 to align with Health lines, include Medicare/Medicaid in totals, implement an alternative risk charge, and revise instructions and formulas. PR019/PR020/PR022 excerpts show factor structures, investment income adjustments, alternate risk charges, and managed care credits, and administrative and stop-loss guidance is updated.