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ARTICLE · 28 AUGUST 2025

Asset Adequacy Testing For Reinsurance

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During the Summer 2025 National Meeting of the US National Association of Insurance Commissioners (NAIC) in Minneapolis, Minnesota, the NAIC adopted the Actuarial Guideline LV: Application of the Valuation Manual...

United StatesInsurance
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During the Summer 2025 National Meeting of the US National Association of Insurance Commissioners (NAIC) in Minneapolis, Minnesota, the NAIC adopted the Actuarial Guideline LV: Application of the Valuation Manual for Testing the Adequacy of Reserves Related to Certain Life Reinsurance Treaties ("AG 55"). This Legal Update reports on AG 55, which requires asset adequacy testing ("AAT") in connection with certain asset-intensive reinsurance transactions entered into by life and annuity insurers.

Following a vote to adopt AG 55 by the Life Actuarial (A) Task Force ("LATF") June 5, and by the Life Insurance and Annuities (A) Committee on July 14, the NAIC's Executive (EX) Committee and Plenary voted to adopt AG 55 on August 13. US insurers subject to AG 55 (as discussed further below) are expected to annually report the results of their AAT to their domestic state insurance regulator with the first reports due April 1, 2026. As a reminder, AG 55 has initially been

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