Q&A—Life & Health Law Manual, and VM-55
Every year the Academy updates the Life and Health Valuation Law Manual, which offers a single document to review and confirm the historical reserving methods, assumptions, and requirements across all 50 states. It has been a significant time-saver when addressing questions or challenges that may arise from regulators, auditors, or internal reviews.
Life Perspectives asked Life and Health Valuation Law Manual Review Subcommittee Chairperson Sonia Reigles some questions about the manual, and VM-55’s impact.
What is the significance of the Life and Health Valuation Law Manual and why does it need to be published on an annual basis?
The Life and Health Valuation Law Manual serves as a reference for actuaries, regulators, and other stakeholders. It consolidates state-by-state statutory requirements related to life and health valuation. Statutory insurance regulation is very dynamic in nature, and an annual update ensures the manual reflects the most current laws and guidance. This timeliness is essential to supporting accurate reserve calculations, maintaining compliance, and enabling consistent communication with regulators.
What is the process for developing the law manual?
The process is detailed-oriented and collaborative in nature. Each year the Academy uses the services of a consulting firm to send state surveys to regulators and reflect the changes in the Life and Health Valuation Law Manual. Additionally, the Academy requests various materials from the NAIC and these are also reflected in the manual. Then the Life and Health Valuation Law Manual Review Subcommittee performs a peer review on the revised manual and provides feedback to the consulting firm (thank you to all volunteers who have helped with this task). The review consists of cross-referencing regulatory bulletins, legislative updates, and valuation manuals to ensure accuracy. The draft goes through several rounds of review before final publication. This laborious process helps ensure the manual remains a trusted resource.
Is there information in the manual that actuaries can’t find elsewhere?
Absolutely. While individual states statues and NAIC materials are publicly available, the manual uniquely compiles this information in a consistent, organized, user-friendly format. It also includes interpretive guidance and clarifications that may not be readily apparent from reading the statues alone. This makes it an invaluable tool for actuaries who need to understand the regulatory landscape across multiple jurisdictions.
What are the key changes that you see in the manual from one year to the next?
The most notable changes involve updates to state-specific valuation requirements, adoptions of new NAIC model laws, and clarifications around implementation of principles-based reserving. In the last few years, we have also seen increased emphasis on alignment with VM-20 and VM-21, as well as evolving guidance related to asset adequacy testing and reinsurance. For the 2025 edition, updates related to VM-55 have been incorporated providing guidance on the use of experience data in assumption development—a growing area of focus for our profession.
Are there any specific regulatory developments that have occurred over the last year that might make their way into the law manual for 2026?
One area to watch is the evolution of guidance around the use of company experience data under VM-55. As companies adopt advanced modeling techniques and as regulators refine expectations, we anticipate further clarification and possibly new requirements in this space.
How do Academy volunteers contribute to the success of the law manual?
The law manual is a huge endeavor and thanks to the work of Academy volunteers, the endeavor is manageable. Volunteers’ expertise, commitment to accuracy, and collaborative spirit ensure that the manual remains a high-quality, reliable resource. Volunteers review statutory changes, validating interpretations and engaging with regulators to resolve ambiguities. This work not only supports the manual but strengthens the actuaries’ role in upholding sound actuarial standards and public trust.
▶ Preorders will be opening soon for the 2026 edition of the Life and Health Valuation Law Manual.
Incoming Life VP Kirsten Pedersen Offers Insights
Incoming Life Vice President Kirsten Pedersen will begin the two-year position during the Academy’s 60th Anniversary Celebration and Governance Transition event on Nov. 21. Pedersen, who received an Academy Outstanding Volunteerism Award in 2023 for her work in the life practice area on state laws and regulations, offered some thoughts on some of the Life Practice Council’s (LPC) priorities in the coming year.
Pedersen will be transitioning from being chairperson of the Life Underwriting and Risk Classification Subcommittee, which she has chaired for more than two years. Also wrapping up a year as chairperson of the Risk Management and Financial Reporting Council’s Data Science and Analytics Committee, Pedersen said she was turning her attention to the LPC, in particular interactions with the NAIC.
“That’s a key focus—there’s a lot of interaction with NAIC and LATF [NAIC’s Life Actuarial Task Force],” she said. “New types of assets, offshore reinsurance, implementation of annuity reserving and capital framework—and, of course, AI and its impact in how we do business, particularly with underwriting and risk classification.”
The LPC’s Investment Summit held in May in New York was a successful event, and Pedersen said it would be planning another. “It’s something we’ll continue next year,” Pedersen said. “Because of everything that’s happening in the industry with some of these assets in really understanding what the risk is and how to deal with them—it’s an important ongoing topic and we are planning another summit.”
Free Livestream for Governance Transition—Academy members can register to attend free livestreams of the Academy’s Nov. 21 Leadership Summit, with opportunities to capture continuing education (CE) credit, watch the governance transition, and celebrate the annual awards presentations.
S&P Podcast Spotlights Academy’s Central Role in Life Insurance
The vital role of actuaries and a deep dive into the Academy’s extensive work on structured securities was the focus of a Sept. 25 S&P Global “Look Forward” video podcast, “The American Academy of Actuaries: Shaping Insurance’s Future.” LPC C1 Subcommittee Chairperson Stephen Smith informed the podcast’s global audience about the critical technical advice the Academy has been providing and will continue to provide to the NAIC on life practice topics. Read more about the Academy’s work in this area at actuary.org.
LPC Presents at NAIC Summer Meeting; Preps for Fall Meeting
LPC volunteers and staff offered public comments at the NAIC Summer National Meeting in Minneapolis in mid-August, covering multiple public policy practice areas and professionalism issues.
Life Policy Project Manager Amanda Barry-Moilanen gave LATF an update on LPC activities, and LPC volunteers offered additional comments on other LATF projects, including the retrospective adoption of the application of VM-22 and adoption of VM-22 amendments (APF-2025-11), and the model governance framework for the generator of economic scenarios (GOES).
Blog post, video recap—More details of the Academy’s engagement in Minneapolis are available in an Actuarially Sound blog post, and the video recap on the Academy’s YouTube page.
NAIC Fall Meeting—The LPC will also present at the NAIC’s Fall National Meeting, set for Dec. 8–11 in Hollywood, Fla.
Life Governance Checklist Released
The Life Underwriting and Risk Classification Subcommittee released Governance Checklist Related to Testing Life Insurance Underwriting for Unfairly Discriminatory Practices, which outlines items intended to raise awareness of the respective governance concerns and are offered as considerations for practicing life actuaries. It includes a series of principles, such as establishing a multi-disciplinary, cross-functional governance team; maintaining written policies and procedures relating to governance of testing procedures; testing within the governance framework; and governance reporting.
LHQ Seminar Underway Outside of Washington, D.C.
The Academy’s annual Life and Health Qualifications Seminar kicked off on Monday, Nov. 17, in Arlington, Va. New this year are separate life and health tracks, following a day of general education—and a three-hour exam on the fourth day.
LPC Presents at SOA ValAct Meeting
LPC volunteers presented at the Society of Actuaries Valuation Actuary Meeting (SOA ValAct), Aug. 17–20 in Chicago:
Outgoing Life Vice President Jason Kehrberg, along with John Di Meo and Bruce Friedland, presented on the new asset adequacy testing and offshore reinsurance actuarial guideline, using case studies to illustrate what the guideline’s testing could look like across a range of reinsurance scenarios.
Donna Claire, Linda Lankowski, and Craig Morrow presented on NAIC activities, with a primary focus on updates to principle-based reserve (PBR) valuations and appointed actuary topics.
Brent Dooley, Bruce Friedland, and Jonah von der Embse presented on VM-22—briefing the audience on the background, associated regulations, calculations, and some high-level results from the recent field test and other modeling.
Linda Lankowski, Catherine Murphy, and April Shen presented on yearly renewable term (YRT) reinsurance treatment under PBR/VM-20.
Rachel Marie Brewster, Robert Eaton, and Matthew Hantelman presented on hybrid life and long-term care (LTC) products, which are growing in popularity, as well as how reserve calculations for these products pose unique challenges.
Webinar Examines Actuaries & Investment Management
The LPC’s Nov. 13 webinar, Actuaries and Investment Management: Let’s Talk! covered how to create a robust communication system between investment management and actuaries, particularly for appointed actuaries and qualified actuaries. It was moderated by Life Investment Analysis Subcommittee member Theresa Resnick, and featured subcommittee member Rhonda Ahrens and Academy members Bryan Kane and Jeremy Lachtrupp. Cach a replay on Academy Learning, a free member benefit.
December Webinar to Look at PBR Reports
The LPC will also hold its annual webinar, PBR: VM-31 as Seen by Regulators, looking at principle-based reserving (PBR) reports and featuring a panel of NAIC regulators from California, Minnesota, New Jersey, and Texas. Thomas Reedy, a member of the LPC’s PBR Implementation Subcommittee and the California Department of Insurance’s Chief Systems Actuary, will moderate the webinar, which is set for Dec. 12. Register today.
Highlights From
Life Perspectives
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Life Public Policy in Brief
The LPC’s Tax Committee released an issue brief, Excess Interest Reserves as Defined Under Internal Revenue Code §811(d), exploring how tax basis excess interest differs from excess interest in actuarial valuation and includes an interactive example of the computation of tax excess interest.
The LPC, along with the Casualty Practice Council, Health Practice Council, and Risk Management and Financial Reporting Council, submitted a joint comment letter to the NAIC’s Risk-Based Capital (RBC) Model Governance (EX) Task Force in response to revised preliminary principles exposed by the task force in September.
The LPC submitted comments and recommendations to the NAIC’s Life Actuarial (A) Task Force (LATF) regarding the Actuarial Guideline 55 (AG 55) Template Exposure.
The Life Illustrations Subcommittee provided comments to LATF and the NAIC’s Life and Annuity Illustration (A) Subgroup regarding the exposed APF 2025-XX Illustrations.
The Annuity Reserves and Capital Subcommittee sent a comment letter to NAIC’s Life Actuarial (A) Task Force VM-22 Subgroup on the Chair Exposure of VM-22 Retrospective Application, and commented on the VM-22 Aggregation Exposure.
Resource Center—Visit the online Resource Center to stay on top of the latest Academy news and activity.
Academy In the News
Insurance Business reported on the NAIC’s target of finalizing a proposal restricting the public disclosure of insurers’ risk-based capital ratios, while noting the Academy’s public-interest comments. Life Annuity Specialist quoted Life Investment and Capital Adequacy Committee Chairperson Stephen Smith in its subscriber-only coverage of the issue.
A JD Supra recap of the NAIC Summer National Meeting noted the Academy’s continued work on collateralized loan obligations
Legislative/
Regulatory Activity
Federal
The U.S. Employee Benefits Security Administration issued a final rule in the Code of Federal Regulations, eliminating the regulatory safe harbor for selecting annuity providers. The removal was prompted by a statutory safe harbor introduced in 2019, which offers a more streamlined and cost-effective alternative for fiduciaries.
State
Alaska Gov. Mike Dunleavy signed SB 132, amending the state’s insurance regulations to include the introduction of prosecution time limitations for life insurance offenses.
Texas Gov. Greg Abbott signed HB 2221, establishing uniform standards for prohibited acts and practices in the life insurance and annuity sectors in order to enhance consumer protections and ensure fair practices.
Abbott also signed HB 4386, outlining new regulations related to the exchange and surrender of annuity contracts and requiring insurers to follow specific procedures when processing exchanges of annuity contracts.
Oregon Gov. Tina Kotek signed HB 2564, amending the life insurance rate review process to require that all premium rate schedules be filed with the director of the Department of Consumer and Business Services, who will have the authority to approve, disapprove, or withdraw these rates.