US insurance regulators are considering tougher capital requirements for some offshore life reinsurance deals, delegates heard at a conference in Hamilton yesterday.

Scott White, president of the National Association of Insurance Commissioners, said regulators were particularly concerned by life and annuity transactions that left insurers holding less capital than they would be required to do under US standards.

He added that the NAIC is also strengthening its oversight of private-credit investments, a growing part of life reinsurers’ investment portfolios and a source of concern for some regulators.

Speaking at the Bermuda International Life & Annuity Conference , Mr White described how regulators are striving to keep pace with rapid change — in investment strategies, cyberthreats and the rapid onset of artificial intelligence.

“Where we find ourselves today as supervisors of this industry, we are navigating rapid, unpredictable change, “ Mr White said. “We’re facing a storm of transformation, if you will.”

On the NAIC’s scrutiny of life reinsurance transactions, Mr White said the failure of an offshore reinsurer to meet its obligations would mean a US insurer having to take back liabilities on its own balance sheet.

“Because some transactions with non-reciprocal reinsurers have shown larger reserve reductions and can create more strain if recapture is ever needed, we’re exploring whether to strengthen our capital requirements to better reflect both the potential recapture risk and the higher credit risk of reinsurers with weaker financial strength,” Mr White said.

Bermuda is the leader in offshore life reinsurance — total assets across its long-term insurance sector exceed $1.5 trillion. Cayman has emerged as a competitor — its life and annuities sector held about $101 billion at the end of 2025.

Bermuda holds recognition of regulatory equivalence from the NAIC, and Cayman is seeking the same.

Mr White said years of low interest rates had pushed life insurers beyond traditional publicly traded bonds into private credit, structured securities and investments involving affiliated companies. Offshore reinsurance, including transactions in Bermuda, had helped insurers manage large volumes of long-term liabilities.

Those developments had benefits, he said. Insurers were well placed to hold less liquid assets for long periods, while offshore markets provided capital and diversification. But the changes had made it harder for regulators to assess risk.

He said supervisors could sometimes have limited visibility of the assets supporting liabilities transferred to a reinsurer offshore.

He cited private credit ratings that do not always reveal their underlying assumptions and valuations based on inputs that are difficult to observe.

“This is not to say that insurers are acting improperly, as these changes occur,” Mr White said. “What it does mean, though, is that the market has evolved faster than our oversight tools, and we needed to respond.”

He said US state regulators had changed rules governing how bonds are classified, strengthened their ability to question ratings. They had also improved reporting on affiliated investment arrangements and updated capital factors for certain structured securities.

“Beginning this year, insurers will give us far more detailed information about private investments — how they are originated, valued, distributed, and supported,” Mr White said.

Mr White said the NAIC had discussed private credit and life insurance with US Treasury Secretary Scott Bessent earlier this year. And it had also responded in writing to questions from senator Elizabeth Warren about their oversight of changing practices in the life insurance industry.

Artificial intelligence poses another challenge for regulators. Mr White described its use in claims processing, underwriting and catastrophe modelling. The new technology also had the potential for unexplained outcomes and errors that spread quickly through automated systems.

He said AI was also changing cyber-risk, helping criminals produce more convincing phishing attempts and synthetic identities while giving insurers better tools to detect threats.

An NAIC examination tool now being piloted in 12 states, including Virginia, where Mr White serves as insurance commissioner, is intended to give supervisors a more current view of how insurers use AI and what controls they have in place. Mr White said the association hoped to adopt it by the end of the year.

Throughout the speech, he emphasised the “longstanding collaboration” between US regulators and the Bermuda Monetary Authority.

“Our markets are interconnected, through reinsurance, capital flows, and global groups that operate across both jurisdictions,” Mr White said.

“And because of that connectivity, our supervision must be equally aligned, ensuring policyholder obligations remain well supported, whether their assets or liabilities are onshore or offshore.

“So, our bilateral work emphasises transparency, shared expectations, and clear communication on emerging risks from private-credit trends to asset-intensive reinsurance.”

Mr White opened and closed with the story of the Sea Venture, whose passengers reached Bermuda after the ship was wrecked in 1609 and later sailed on to help the struggling Jamestown settlement in his home state of Virginia.

The historical connection, he suggested, offered a lesson for supervisors facing unfamiliar risks: adapt their frameworks together as conditions change.