VM-22: The Next Big Shift in Annuity Valuation

Chad Record 
Vice President, US – Insurance & Reinsurance

The NAIC’s VM-22 goes live January 1, 2026, with a three-year phase-in period before it’s fully required for new issues in 2029. Coming out of the recent ValAct meeting in Chicago, the consistent message was that VM-22 isn’t just a valuation change. It’s an enterprise-wide transformation that touches actuarial, finance, risk, and data teams all at once.

What’s Different

• Risk-based reserves, not formulas – Instead of CARVM’s fixed rules, reserves will be built on stochastic models that reflect a company’s own risks and assumptions.
• New scenario engine – GOES becomes the required generator of economic scenarios, which means companies need to rethink runtime, governance, and version control.
• More transparency – The introduction of a standard projection amount gives regulators and boards a clearer view into reserve results and company assumptions.
• Tighter controls – Annual assumption reviews and governance standards are moving from good practice to requirement.

What We Heard at ValAct

• Modeling at scale is the starting point, not the finish line. Companies are experimenting with runtimes and granularity under GOES to make sure production runs are sustainable.
• Finance, actuarial, and data leaders need a single playbook. Several presenters shared how they’ve set up cross-functional teams to align assumptions, controls, and governance.
• Industry field tests have already shown where sensitivities differ from current frameworks which some companies are leveraging to prioritize changes sooner rather than later.

A Practical Next Step

Over the next 90 days, companies may consider:

1. Mapping in-scope products and identifying the blocks that will drive most of the reserve change.
2. Standing up GOES-compliant runs in parallel with existing processes.
3. Locking in a cycle for annual assumption review and making sure data lineage is fully documented.
4. Testing runtimes and control frameworks so they hold up under audit.
5. Preparing board-ready explanations of why reserves look different under VM-22.

Why It Matters

This isn’t just an actuarial project. VM-22 affects product design, ALM, hedging, capital management, and how leadership explains results to boards and regulators. The companies that get ahead will be the ones that turn compliance into an opportunity for faster, more explainable decision-making.