The National Association of Insurance Commissioners (NAIC) recently adopted Actuarial Guideline 55, which covers reinsurance asset adequacy testing. AG 55 focuses on life insurers that engage in certain reserve-financing or “asset-intensive” reinsurance treaties, effective Dec. 31, 2025, on a reporting basis. It aims to ensure that ceded reinsurance does not undermine reserve adequacy. In this report, we outline the following key components of a similar memorandum and their significance:
- Asset descriptions
- Assumption documentation
- Methodology
- Rationale for degree of rigor
- Materiality thresholds used
- Asset adequacy criteria
- Changes from prior year’s analysis
- Summary of results
- Conclusions
- Relevant aspects of AG 53
- Scope of the memorandum
- Qualified actuary and standards of practice