Author: Steve Krupa, Senior Director - Actuarial Services, Moody's
Effective from January 1, 2026, use of the National Association of Insurance Commissioners’ (NAIC) new Generator of Economic Scenarios (GOES) will be required for calculating U.S. reserves and required capital. The Moody’s AXIS™ Actuarial System is ready.
The 2026 Valuation Manual (VM) from the NAIC introduces a shift. Insurers can now use non-prescribed economic scenario generators across principle-based reserving (PBR) requirements for life insurance and annuity products, namely VM-20, VM-21, and VM-22.
This change opens the door to more efficient modeling approaches—especially for firms navigating the operational complexity of large scenario sets.
Moody’s supports GOES in the AXIS system through two key approaches:
- Native AXIS system implementation: A transparent, customizable method that closely replicates prescribed Treasury and Equity scenarios. It’s fast and available to any AXIS system user with a Stochastic Processing/Tools license. However, the Corporate Bond model used is not maintained by the Academy of Actuaries and may differ from the prescribed version.
- Moody’s Scenario Generator: Integrated directly into the AXIS system, this option supports distributed processing and offers runtime improvements for large scenario sets. A replicator for prescribed scenarios is in development, with refinements expected later in 2025.
Both approaches align with the NAIC requirements for non-prescribed generators and offer flexibility for firms seeking to streamline scenario generation while maintaining compliance.
Moody’s continues to explore alternative scenario reduction techniques, including stratified sampling methods, to help insurers manage complexity and act with confidence.
Contact your Moody’s representative for more details, or to find out more information on the Moody’s AXIS Actuarial System, click here.
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