[August 17, 2026]

Milliman AG 55 implementation survey finds life insurers moving quickly to address new reinsurance testing expectations

Milliman, Inc., a premier global consulting and actuarial firm, today announced the results of its Actuarial Guideline LV¹ (AG 55) life insurance industry survey, which examined how companies are responding to new asset adequacy testing expectations for certain reinsurance arrangements.

The survey included responses from 23 companies, with 22 reporting that they were in scope for AG 55 testing. The results show that the industry has moved quickly toward cash flow testing as the primary and most rigorous method for evaluating in-scope reinsurance arrangements per the AG 55 requirements, while also revealing areas where practice continues to evolve.

"AG 55 is becoming more than a technical actuarial exercise for life insurers," said Yan Fridman, a consulting actuary at Milliman. "It is forcing companies to demonstrate that reinsured liabilities are supported by appropriate assets, that the analysis is explainable, and that the process can be repeated consistently each year."

The survey identified four key themes from AG 55 year one filing:

• Variety shown in determining the Starting Asset Amount. Nearly all in-scope respondents reported using cash flow testing for AG 55 and calculated results under the mandatory run. Alternative runs were less utilized and served a variety of purposes when used.
• Asset access appears workable for most companies; the challenge is traceability. Most companies reported using actual asset portfolios in their analysis. However, the harder question is increasingly whether companies can demonstrate that the assets are the right assets, on the right basis, and mapped appropriately to the relevant treaty or block.
• Governance expectations are expanding. The appointed actuary remains central to the process, but the survey suggests that broader governance practices-such as project planning, independent review, finance and risk involvement, and Board or Audit Committee reporting-are still developing across the industry.
• Explainability and repeatability are emerging as the next challenges. Many companies can show a testing result, but fewer appear to have developed robust attribution or driver analysis explaining why results changed. The survey also points to timing and operational challenges, including asset data availability, model run times, internal review, and reinsurer coordination.

The findings indicate that year two AG 55 implementation will likely focus on building a more repeatable process. Companies may need stronger asset data feeds, clearer documentation, more consistent review controls, and better explanations of how reinsurance affects reserve adequacy.

For more information about Milliman's AG 55 survey findings, contact Yan Fridman at [email protected].

About Milliman

Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges-from extreme weather and market volatility to financial insecurity and rising health costs-so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at milliman.com.

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