2024 ValAct Meeting - Session 5E: Adapting Models for VM-22 Implementation 8.27.24 Recording

Principle-based reserves for non-variable annuities are upon us, with the NAIC targeting a VM-22 effective date of January 1, 2026. This session will focus on considerations related to adapting existing cash flow models for the purpose of calculating VM-22 reserves. What model enhancements may be necessary to determine the VM-22 scenario reserves, exclusion tests, and standard projection amount both as of the valuation date and into the future for forecasting purposes? Where can simplifications, approximations, and model efficiency techniques be used to reduce model complexity and run time? Can existing assumptions be leveraged in the development of VM-22 prudent estimate assumptions? How can models be used to analyze the change in VM-22 reserves from one period to the next? These questions and more will be explored from the perspective of actuaries at an actuarial software vendor, insurance company, and consulting firm. At the end of this session attendees will understand how their company's existing cash flow models can be leveraged to meet the new requirements for principle-based reserves under VM-22.