The NAIC’s methodology differs from banking regulators’, which do not allow banks to defer interest rate-related losses.

This change is criticized by consumer advocates, who argue that it will encourage insurers to risk investment losses to boost returns.

The American Council of Life Insurers (ACLI) lobbied for the reform, which aims to standardize interest rate-related losses and gains.

The NAIC has declared that all states will automatically implement the move, even though states oversee US insurers.

Insurers can now amortize interest rate-related losses up to 10% of their statutory surplus, which can be used to pay policyholders in unexpected circumstances.

The new regime has some safeguards, with insurers aiming to stay close to 400% to improve credit ratings.

MassMutual, Prudential, OneAmerica, and Principal Financial are Fitch-rated insurers with the greatest negative IMR balances.