May’s insurance regulatory landscape was marked by the continued unusually heavy concentration of activity early in the legislative cycle with substantive activity across multiple fronts — and early June data confirms the pace is not slowing down. At the state level, legislators continued expanding adjuster licensing and continuing education requirements, with Connecticut granting its Insurance Commissioner new authority over adjuster CE and South Carolina enacting a broad package of adjuster-related reforms. Across lines of business, states took action on AI oversight in health insurance claims, property and casualty transparency, financial exploitation protections, workers’ compensation, and wildfire-related disclosure obligations. On the federal side, significant final rules reshaped the No Surprises Act arbitration process, set operational standards for the 2027 ACA plan year, and established new benefit and payment parameters — with CMS continuing to drive a steady stream of operational compliance notices into June. Beyond CMS, FEMA announced NFIP program changes and updated the Write Your Own arrangement for FY 2027, while FinCEN issued a joint advisory flagging financial integrity risks tied to non-work authorized populations that carries implications for insurers’ AML and fraud-detection programs. And the annuity best interest training requirement, now in effect across all 50 states, remains an ongoing compliance obligation with the District of Columbia’s adoption still pending.
For carriers, agencies, and compliance teams, the picture that emerges is one of high-volume, multi-dimensional regulatory change. Early June regulatory tracking across state and federal insurance activity reflects the breadth of that workload: state-level activity is concentrated in notices and enacted legislation spanning claims settlement, policies and contracts, rates and premiums, taxes and fees, and licensing requirements, with particular density in group and individual accident and health lines and workers’ compensation. Federal activity remains heavily driven by CMS program operations, but extends beyond health into flood insurance and financial crime. Firms that invest in scalable, technology-driven compliance processes are better positioned to manage the breadth and pace of change — and to demonstrate that they have done so when regulators come calling.
Adjuster Licensing and CE Requirements Continue to Expand
Two states moved to expand adjuster-related requirements in May:
Connecticut enacted CT H 5373, granting the Insurance Commissioner the authority to establish adjuster continuing education requirements. This adds Connecticut to the growing list of states with formal adjuster CE mandates, creating new tracking obligations for firms managing adjuster populations in the state.
South Carolina enacted SC S 196, a comprehensive package that establishes adjuster and workers’ compensation CE requirements, introduces a fingerprint requirement for licensure, adjusts fees, and includes other miscellaneous updates. The South Carolina Department of Insurance is currently drafting the bulletins and FAQs that will provide operational detail on the new requirements. Firms should monitor for those publications closely, as they will define the specific compliance obligations and timelines.
For firms managing adjuster licensing and CE across multiple jurisdictions, changes like these underscore the value of centralized credentialing and CE tracking platforms that automatically reflect new state requirements as they take effect. RegEd’s Adjuster Licensing solution, including its Smart Licensing capability for automated nonresident licensing, is designed to address exactly this kind of multi-state complexity.
Annuity Best Interest: Nationwide Compliance Continues
All 50 states now have a best interest standard and training requirement in place for annuity sales. The District of Columbia remains the only jurisdiction that has not yet finalized its rule. DC originally proposed its regulation in October 2025 and is expected to re-propose with edits to align more closely with the NAIC’s Model Regulation.
While the milestone of 50-state adoption is now over a year old, the compliance implications are ongoing. Every producer selling annuities must have completed the required best interest training, and firms need to track compliance across all active jurisdictions, with DC expected to add to that obligation when it finalizes its rule. RegEd, in partnership with the Insured Retirement Institute (IRI), delivers annuity best interest training and tracking to close to 200,000 producers representing more than 80% of annuity carriers, making it the industry’s most widely adopted solution for meeting this requirement at scale.
Notable Industry-Wide Regulatory Trends
Several cross-cutting trends emerged in May that reflect the direction of state and federal regulatory attention:
Disaster Model Transparency and Wildfire Disclosure: Several states are now requiring insurers to be highly transparent about their catastrophe and disaster calculation models. This trend reflects growing regulatory scrutiny of how insurers price and underwrite risk in climate-exposed markets. Reinforcing this theme, early June state regulatory activity includes wildfire-related insurer and FAIR Plan notification and disclosure requirements, signaling that climate-driven loss exposure will continue to generate new compliance obligations around modeling methodologies, consumer communications, and market-of-last-resort participation.
Paid Family and Medical Leave (PFML): State insurance and workforce regulators in several states finalized and refined Paid Family and Medical Leave programs. The expanding patchwork of state PFML systems continues to create complexity for carriers and employers navigating multi-state compliance obligations.
ACA Premium Pressures: States are working to address Affordable Care Act premium increases following the expiration of enhanced premium subsidies. This is a developing area that will have direct implications for health plan issuers and exchange-based coverage in the coming plan year.
Private Credit and Offshore Reserves: Numerous regulators met to discuss developments in private credit markets, the U.S. life insurance sector, and the movement of U.S. life and annuity reserves to offshore jurisdictions. State and NAIC regulatory responses to these structural market shifts are expected to continue evolving.
Health Insurance Administration and Utilization Controls: Early June state regulatory data shows continued heavy activity in group and individual accident and health lines, including prior authorization requirements and product and benefit administration changes. For health-focused carriers and TPAs, this is a persistent workload driver that demands tracked implementation processes to demonstrate that regulated changes have been executed on time and across the right operational teams.
Rates, Premiums, Fees, and Licensing: State-level activity in rates, premiums, taxes and fees, and licensing-related requirements remains a steady and significant compliance workload. These are the kinds of obligations that span product, actuarial, operations, legal, and compliance functions within an organization, making role-based task management and closed-loop tracking particularly valuable.
Federal Insurance Developments
Federal insurance regulatory activity in May and early June extended well beyond CMS health-plan operations, with significant developments from FEMA on the National Flood Insurance Program and a joint FinCEN advisory with direct implications for insurers’ anti-money laundering and fraud detection programs.
No Surprises Act — Independent Dispute Resolution (IDR) Final Rule: The Federal IDR Operations final rule was published, overhauling the No Surprises Act’s arbitration process to reduce administrative burdens and increase process transparency. Addressing longstanding concerns from providers, plans, and regulators about the efficiency and fairness of the dispute resolution framework, the rule was accompanied by a fact sheet and followed in early June by an IDR administrative fee update. The No Surprises Act remains a live operational pain point for health plans, providers, and their compliance teams — not only in terms of awareness of regulatory changes, but in demonstrating process implementation, dispute tracking, and exception handling through auditable workflows.
CMS Final 2027 Letter to Issuers: CMS released its Final 2027 Letter to Issuers, providing operational and technical guidance for health insurance companies seeking to offer Qualified Health Plans on the ACA Exchanges. The letter sets the regulatory and certification standards for the 2027 plan year, and issuers should review it carefully to ensure their product offerings and operational processes are aligned with the updated requirements.
HHS Notice of Benefit and Payment Parameters for 2027: CMS issued the final rule setting standards for Health Insurance Exchanges, health insurance issuers, and agents, brokers, and web-brokers who connect consumers to ACA coverage. The rule also addresses the Basic Health Program. Firms involved in exchange-based distribution should review the final parameters for impacts on their operations, product design, and consumer-facing processes.
CMS Contract Year 2027 Standardized Materials and Medicaid Requirements: Early June CMS activity included the release of Contract Year 2027 standardized materials and State Medicaid Agency contract submission requirements for Contract Year 2027, along with a standard civil money penalty amount update and Exchange/QHP-related notices addressing nondiscrimination requirements. Taken together, the volume of CMS operational notices reinforces the need for federally regulated insurance organizations to have disciplined intake, tracking, and implementation processes in place — particularly around claims and dispute handling, standardized communications, reporting, and accountable execution across operational teams.
NFIP Program Changes and FY 2027 Write Your Own Arrangement: FEMA announced updates to the National Flood Insurance Program that will take effect December 1, 2026. The program changes, detailed in FEMA Memorandum W-26001, include new guidance clarifying that a policy effective date cannot be more than 90 days from the application date, updated cancellation conditions for policies replaced by non-NFIP flood coverage, postmark date documentation requirements, and revisions to the declarations page — including a new premium transparency message directing policyholders to information about how premiums are calculated.
Separately, FEMA published the FY 2027 Financial Assistance/Subsidy Arrangement for private property insurers participating in the NFIP’s Write Your Own (WYO) Program. The original May 5 notice set an October 1, 2026 effective date, but FEMA subsequently issued a correction on May 19 pushing the effective date to December 1, 2026 due to the lapse in DHS appropriations that prevented timely publication. Insurers interested in participating in the WYO Program for FY 2027 must submit their intent to subscribe or re-subscribe by September 2, 2026. For WYO carriers and their compliance teams, the combination of program changes and the updated Arrangement timeline means December 2026 will be a significant operational milestone requiring coordinated implementation across underwriting, policy administration, and claims operations.
FinCEN Joint Advisory: Non-Work Authorized Populations and Financial System Integrity Risks: On June 5, FinCEN — jointly with the FDIC, OCC, and NCUA, and in coordination with the IRS — issued Advisory FIN-2026-A002 directing financial institutions to be vigilant against fraud schemes and suspicious activity involving the unlawful employment of non-work authorized individuals. The advisory identifies identity theft and payroll fraud as key mechanisms used by complicit employers — particularly in agriculture, construction, domestic service, and hospitality — to conceal immigration law violations, and includes 18 red flag indicators to help institutions detect and report related suspicious activity.
While the advisory is framed primarily for banks and credit unions, the implications extend to insurers and insurance-adjacent financial institutions. Insurers with AML and fraud-detection obligations — particularly those offering products where employment verification, payroll data, or employer relationships factor into underwriting, claims, or distribution — should evaluate whether the advisory’s red flags and typologies warrant updates to their own suspicious activity monitoring, customer due diligence, and training programs. The advisory is the first concrete deliverable under Executive Order 14406, Restoring Integrity to America’s Financial System, and signals that financial integrity and immigration-related compliance expectations are likely to expand further in the months ahead
Line-of-Business Highlights
Across state insurance markets, notable regulatory actions emerged in several lines:
Health: Alabama, Georgia, and Virginia enacted laws governing how health insurers utilize artificial intelligence. The updates mandate strict human oversight for any adverse claims decisions or automated clinical denials, reflecting a growing legislative consensus that AI-assisted decision-making in health insurance requires meaningful human review safeguards. Separately, several states addressed dental services and dental provider contracts, and Oklahoma provided information about the transition of its health insurance marketplace to a state-based exchange on the federal platform. Early June state activity continued this momentum, with claims settlement emerging as the single most common regulatory theme in state insurance tracking, alongside ongoing activity around prior authorization and health benefit administration changes.
Property & Casualty: New Texas laws require all admitted insurers to provide written explanations for any declined, canceled, or non-renewed policies, a significant transparency measure for policyholders. More states enacted laws concerning peer-to-peer car sharing program coverage, an area of continued legislative attention as the sharing economy matures. Virginia enacted laws addressing coverage refusals, cancellations, or nonrenewals of owner-occupied dwellings due to the age of the dwelling’s asphalt shingle roof. Early June activity added wildfire-related insurer and FAIR Plan disclosure requirements to the P&C compliance landscape, along with continued state action on captive insurance and insurance holding company systems.
Life: Iowa enacted new laws regarding suspected financial exploitation of eligible adults, including mandates for reporting, employee training, and delaying transactions or disbursements when exploitation is suspected. Colorado enacted a law regarding the payment of designated benefits to a charitable organization upon the death of a donor. Separately, early June regulatory tracking flagged continued state activity around limited long-term care insurance, an area where product design, disclosure, and compliance obligations continue to evolve.
Workers’ Compensation: The Oregon Workers’ Compensation Division issued guidance on determinations of whether employment is “casual,” providing clarity on a classification question that affects coverage obligations. Tennessee enacted a law concerning awards of attorneys’ fees and costs incurred when an employer unreasonably denies a workers’ compensation claim or unreasonably fails to timely initiate benefits. Workers’ compensation was one of the most active coverage areas in early June state regulatory tracking, alongside activity related to Second Injury Board operations and TPA and MEWA review and audit eligibility requirements.
How RegEd Can Help
The volume and breadth of state and federal insurance regulatory activity in May and early June illustrate why change management at scale has become a core operational requirement for carriers, TPAs, MGAs, and health-focused insurers. With state-level changes spanning claims settlement, policies and contracts, rates and premiums, licensing, privacy and security, and multiple lines of business simultaneously, firms need structured intake, requirement mapping, assignment, and closure-evidence workflows to keep pace.
RegEd’s Regulatory Change Management solution continuously monitors, identifies, and analyzes regulatory changes across all 50 states, the District of Columbia, and federal agencies, with more than 40,000 regulatory items vetted annually by a team of regulatory experts with 450+ years of combined experience. Plain-language distillations, relevance filtering, and closed-loop task management ensure firms can move from awareness to implementation efficiently and with full documentation.
Complementary solutions — including CE Central for tracking producer and adjuster continuing education, the Annuities Training Platform for best interest compliance, Smart Licensing for automated nonresident licensing, and Adjuster Licensing for centralized credentialing — help firms operationalize regulatory requirements across the full producer compliance lifecycle.