Aggregation Method Implementation (G) Working Group
Tuesday, December 09, 2025
1:15 PM CST
Diplomat Convention Center—Atlantic Ballroom—Level 2
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Group Capital Calculation
Background
Last Updated: 1/5/2026
Issue: U.S. state insurance regulators have adopted a group capital calculation (GCC) for use in solvency monitoring activities. The calculation is intended to provide additional analytical information to the lead state for use in assessing group risks and capital adequacy to complement the current holding company analysis in the U.S. It includes information on potential risks to policyholders emanating from outside the insurance companies, as well as the location and sources of capital within the group. The calculation will help state insurance regulators perform an assessment of capital when combined with other information obtained by state insurance regulators. This includes group organizational information provided on Schedule Y, enterprise risk information on Form F, and internal risk self-assessment information in Own Risk and Solvency Assessment (ORSA) filings (where applicable).
Background: Beginning in 2008, through the NAIC Solvency Modernization Initiative (SMI), U.S. state insurance regulators devised plans for revisions to group supervision. During and after the SMI, considerable attention was given to the framework around group supervision. Considerable revisions were made to the Insurance Holding Company System Regulatory Act (#440), which introduced supervisory colleges and included the implementation of a new regulatory filing; i.e., the Enterprise Risk Report (Form F). In addition to these revisions, state insurance regulators also implemented the Risk Management and Own Risk and Solvency Assessment Model Act (#505), which required certain insurance companies and/or insurance groups to file an ORSA summary report with their lead state insurance regulator.
The GCC is intended to fit seamlessly and efficiently with these and other group supervision tools currently implemented by state insurance regulators. This analytical tool is designed to include information on potential risks, as well as the location and sources of capital within the group. As such, the tool can only be helpful to the extent that it is consistent with the lead state insurance regulator’s view of such risks and sources. The scope of the group is determined by the lead state based upon their understanding of the group and considering the input of other domestic states or other state insurance regulators that have an entity in the group.
While the default starting point for the group should be the ultimate controlling person as defined in Model #440, it is incumbent upon the lead state to define the scope of application differently if the facts and circumstances suggest a different approach is more appropriate. The proposed approach to establishing the scope of the group for the purposes of applying the GCC leverages existing group supervision tools and allows for lead state insurance regulators to utilize information gained from these tools, as well as communication with other state insurance regulators to drive the implementation of the GCC.
Actions
In December 2020, the NAIC adopted the initial GCC Instructions and Template, along with revisions to the Insurance Holding Company System Regulatory Act (Model #440) and the Insurance Holding Company System Model Regulation with Reporting Forms and Instructions (Model #450) to implement GCC filing requirements and provide legislative and regulatory language for states’ use in enabling the GCC. The NAIC also adopted related regulatory guidance for utilizing the GCC through updates to the NAIC Financial Analysis Handbook. The GCC Instructions and Template are maintained and updated periodically; the most current year-end instructions and template are posted by the Group Capital Calculation (E) Working Group.
On December 16, 2021, the NAIC Executive (EX) Committee and Plenary adopted the Process for Evaluating Jurisdictions that Recognize and Accept the Group Capital Calculation. The Mutual Recognition of Jurisdictions (E) Working Group oversees this evaluation process and maintains the NAIC list of jurisdictions that meet NAIC requirements for recognizing and accepting the NAIC GCC.
In addition, the NAIC has worked with other interested jurisdictions to develop the Aggregation Method (AM)—a jurisdictionally agnostic approach to group capital that is influenced by, and calculated similarly to, the GCC. In December 2024, the International Association of Insurance Supervisors (IAIS) concluded that the AM provides a basis of implementation of their Insurance Capital Standard (ICS) for Internationally Active Insurance Groups (IAIGs). In 2025, the NAIC created the Aggregation Method Implementation (G) Working Group (AMIWG). AMIWG is reviewing the US group capital framework, identifying potential refinements and will be recommending the final version of the AM that will serve as the US implementation of the ICS. AMIWG will be coordinating with other committees (including the GCCWG) on this implementation.
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