US life and health insurance impairments fell by half in 2024, with only five companies experiencing financial distress compared to 10 in 2023, according to AM Best research published in March 2026.
The sharp decline marks a significant improvement for industry stability, though recent impairments continue to stem from troubled affiliate relationships. Three of 2024’s five impairments involved a Connecticut life insurer and its two captive reinsurance subsidiaries, all placed in rehabilitation after adverse mortality experience in universal life business created claims volatility and deteriorating finances.
Over the broader 2000-2024 study period, AM Best identified 198 total life and health insurer impairments, with accident and health insurers accounting for 69% of failures. The leading cause was struggles operating as nonprofit health insurance cooperatives under the Affordable Care Act, responsible for 19 impairments, followed by fraud (15 cases) and rapid growth challenges (13 cases).
Of the 198 impairments, 160 resulted in insolvent liquidations while 36 entered rehabilitation proceedings. Small regional players proved particularly vulnerable, with 94 health insurers operating in just one state among those that failed.
The improving impairment trend suggests enhanced industry oversight and risk management, though affiliate contagion risks remain a key concern for regulators to monitor.
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