The National Association of Insurance Commissioners (NAIC) has adopted three initiatives intended to strengthen life insurers’ ability to meet policyholder claims by updating economic scenario modelling used for reserve and capital calculations, expanding principle-based reserving to certain fixed annuities, and adding disclosure requirements for some reinsurance arrangements. The package includes a new Generator of Economic Scenarios (GOES) designed to reflect both the low-interest-rate environment of the last decade and recent rate increases, which will be used in life insurers’ principle-based reserve and capital calculations. NAIC members also adopted principle-based reserving requirements for non-variable (fixed) annuities to better capture risk across a broad range of products as sales rise in a higher-rate environment. In addition, Actuarial Guideline 55 requires additional disclosures on certain reinsurance contracts to help ensure ceding insurers maintain adequate reserves after transferring risk to a reinsurer, reflecting increased use of reinsurance to support growing fixed annuity sales.
National Association Of Insurance Commissioners 2025-08-21
National Association of Insurance Commissioners adopts scenario modelling, reserving and disclosure measures for life insurers and fixed annuities
The National Association of Insurance Commissioners (NAIC) has adopted initiatives to enhance life insurers' capacity to meet policyholder claims by updating economic scenario modelling, expanding principle-based reserving to fixed annuities, and adding reinsurance disclosure requirements. The new Generator of Economic Scenarios (GOES) will be used for reserve and capital calculations, reflecting recent interest rate changes. Actuarial Guideline 55 mandates additional disclosures on certain reinsurance contracts to ensure adequate reserves.