The ermorsa committee comment letter to actuarial standards board on december 2018 exposure draft of asop no. Users of the naic own risk and solvency assessment orsa guidance manual from. Origins and implications for enterprise risk management 2015, journal of insurance regulation vol. A change in the orsa guidance manual shall be effective on the january 1 following the calendar year in which the changes have been adopted by the naic. Ermorsa committee comments to the naics group solvency issues e working group on the form f guidance manual exposure draft. Naic orsa guidance for financial analysts examiners may. Naic panel seeking to attract more groups, insurers in. The holder of this manual may enter a passwordprotected naic website at. Risk management and own risk and solvency assessment model act as adopted by the financial condition e committee on september 6, 2012. Revisions to actuarial guideline xxxviii ag 38 as adopted by the life insurance and annuities a committee and financial condition e committee on september 6, 2012.
Section 2729a5effective january 1, 2017 orsa summary report. Department prepared analysis of orsa summary report analysis with other regulators with naic or third party consultant with other regulators with naic or third party. Insurance project report to the steering committee. The naic risk management and own risk and solvency assessment model act went into effect on jan. This text is still under consultation, but can anticipate the impact of level 3 measures on the orsa. This ss contains pra expectations of firms regarding their orsa, including the orsa report, the firms policy regarding its orsa and the associated processes. Sep 20, 2012 with respect to section 2, the guidance manual addresses the insurers assessment of risk exposures. The model requires companies over a certain size threshold to conduct an annual own risk and solvency assessment consistent with the orsa guidance manual adopted in 2011. Orsa latest from fsa and eiopa kathryn morgankathryn morgan institute of actuaries 29 september 2011 key messages there are no excuses for not doing aayt gnything most firms have a lot of the components in place already respond to the eiopa consultation 2. In the last year, the national association of insurance commissioners naic has helped the industry take a big step toward this goal by leading development of the own risk and solvency assessment orsa guidance manual and model act. Aug 26, 2015 the naic 2014 orsa pilot key results and recommendations to the industry webinar was held on august 11, 2015.
In essence, an orsa is an internal process undertaken by an insurer or insurance group to assess the adequacy of its risk management and current and prospective solvency positions under normal. Orsa information sharing best practices confidential information includes. Naic own risk and solvency assessment orsa guidance manual in 2012, the naic orsa guidance manual and the risk management and orsa model act the own risk and solvency assessment orsa is on its way model act in september 2012, naic adopted the risk management own risk and solvency assessment model act, guidance manual additional details. Naic orsa and risk capital casualty actuarial society.
In march 2012, the naic approved an orsa guidance manual that contains specific information reporting requirements bests news service, sept. The manual states that it is intended to provide guidance for completing each section of the orsa summary report, which should therefore make the job a doodle. This roadmap sets out the policy direction and priorities for smi activities and. All insurers to complete their first orsa by december 31, 2014. Users of the naic own risk and solvency assessment orsa guidance manual. Companies domiciled in states that passed legislation adopting the naics model act should be actively. Risk management and financial reporting council american. Naic orsa guidance manual to determine if additional information is needed. The naic adopted the risk management and own risk and solvency assessment rmorsa model act on september 12, 2012. Increased scheduling of supervisory colleges and implementation of supervisory colleges tracking documentation. Own risk and solvency assessment orsa e subgroup this edition of the naic own risk and solvency assessment orsa guidance manual has been revised from the previous edition. Naic own risk and solvency assessment guidance manual general guidance each orsa process will be unique the orsa summary report will be used to gain a highlevel understanding of the process the report will be supported by the insurers internal risk management materials minimum the orsa summary report should discuss. Under the model the commissioner can request an annual filing of orsa summary reports.
Apr 16, 2015 naic references the rims risk maturity model for orsa guidance by steven minsky on april 16, 2015 12. Naic orsa guidance manual model act second pilot implementation china circ riskbased solvency framework erm guidelines implementation japan fsa orsa no guidance yet first risk report. Twentyone us insurers have volunteered to take part in the national association of insurance supervisors naic orsa pilot project. A pilot exercise will run in 2012, from which the naic plans to issue public feedback on a nonames basis. Some interesting bits jump out, not necessarily in contrast to reportedobservable differences from the eu approach, more the fact that they are specified in the manual rather than. However, per the naic, one of the most difficult exercises in modeling insurergroup. Although development of such supervisory guidance has just begun, some of the guidance is expected to be centered on the five key principles developed in 2012 as part of the naic orsa guidance manual. The orsa guidance manual includes information such as the goals of the orsa, detailed descriptions of the three sections of an orsa report, and orsa exemption criteria 2011 pwc 9 orsa guidance manual adopted by naic executive committee in march 2012 draft orsa model act released for public comment in april 2012. Risk management and own risk and solvency assessment model act, national association of insurance commissioners, 2012. The smi ex task force coordinates all naic efforts to successfully accomplish the smi, utilizing the technical.
Naic update winter 20 top stories corporate governance model hits snag reinsurance changes move forward at naic, states 20 orsa pilot results are positive life insurerowned captive use concerns regulators a private equity leader provides assurances on the staying power of the sectors capital also in this issue. One of the naics goals is to avoid creating duplicative regulatory requirements for internationally active insurers. Based on the experience the naic gained from the orsa pilot project in which insurers filed confidential draft orsa summary reports, the orsa guidance manual will be. The orsa guidance manual states that a formal risk appetite statement, and associated risk tolerances and limits are foundational elements of risk management for an insurer. This edition of the naic own risk and solvency assessment orsa guidance manual has been revised from the previous edition. Saenz, on behalf of the american academy of actuaries 1 orsa subgroup, i appreciate the opportunity to provide comments on the december 2012. Naic own risk and solvency assessment orsa guidance manual. Regulatory bodies naic own risk solvency assessment orsa. Provides guidance to insurersgroups for reporting on orsa.
Orsa subgroup comments to the naic on its december 2012 draft, guidance manual for the own risk and solvency assessment, including information on actuaries involved in enterprise risk management. January 1, 2015 a new regulatory requirement intended to. The own risk and solvency assessment orsa is on its way october 2012, cipr newsletter. The naics orsa guidance manual will require compaa nies that meet. Naic adoption of the own risk and solvency assessment orsa guidance manual. A change in the orsa guidance manual shall be effective on the january 1. A component of the insurers enterprise risk management. At the 2012 fall national meeting, the information systems task force confirmed that the naic would be authorized to require only online filing for all annual and quarterly financial statements, beginning with data year 2012 annual filings. Validation of the orsa institute and faculty of actuaries. Canada osfi orsa guidance consultationfinal guidelines implementation u.
The misapplication of theory, selection of inappropriate sample techniques or data, and incorrect calculations during implementation can. In march 2012, the financial condition e subcommittee was instructed by the naic executive ex. The orsa manual, if adopted by the naic and individual states, would apply the orsa requirement to standalone insurers with premium exceeding the manuals exemption threshold. This model act stipulates that large and medium size u. The american insurance association aia is warning that the us own risk and solvency assessment orsa must not turn into a checkbox exercise, as insurers begin to take part in a second test run of. Risk management and own risk and solvency assessment model act. As adopted by financial condition e committee september 6, 2012 1.
It was scheduled to last two hours and provided a lot of good detail the entire time although i was grateful for the 5 minute break in the middle of the webinar. With respect to section 2, the guidance manual addresses the insurers assessment of risk exposures. This second pilot project aims to help state regulators improve their guidance to firms on the assessment. Upon the commissions request, and no more than once each year, an insurer shall submit to the commission an orsa summary report or any combination of reports that together contain the information described in the orsa guidance manual, applicable to the insurer or the insurance group of which it is a member, or both. Section 5 of the model act constitutes a legal basis to perform orsa at the group level. Guidance manual and what regulators are expecting, what orsa filings will look like. Saenz, on behalf of the american academy of actuaries. As with the naic model act, texas orsa is targeted at larger companies and groups. Therefore, as of january 1, 20, the naic will accept only filings submitted via the internet filing. Foster effective enterprise risk management provide a group level perspective on risk and capital required of. It was removed from the level 3 guidance on the orsa, but in the consultation responses eiopa said it would still be required as part of the general system of governance requirements. Texas enacts own risk and solvency assessment orsa. The own risk and solvency assessment orsa a regulatory.
Pursuant to the orsa guidance manual and the risk management and own risk and. For the national association of insurance commissioners naic, its national meeting in december in washington, d. Orsa own risk and solvency assessment naic model law adopted in september 2012 naic guidance manual revised march 20. By statute, the orsa summary reports are not subject to public disclosure. Naic own risk and solvency assessment orsa guidance manual draft 8511 created by the naic group solvency issues working group.
Naic own risk and solvency assessment orsa guidance manual, national association of insurance commissioners, 2011. Smi roadmap dec 2012 final national association of. Mar 20, 2014 during the naics riskfocused surveillance working group call on march 18, 2014, two new documents were approved to be released as exposure drafts. Europe solvency ii orsa eiopa guidance pilots interim orsa solvency iiimplementation.
Naic orsa overview orsa own risk and solvency assessment naic model law adopted in september 2012 naic guidance manual revised march 20 effective date. The latest draft orsa guidance manual was released on oct. Texas orsa filings will be effected in accordance with the naic s published orsa guidance manual as it is updated from time to time. The exposure draft comment period ends on may 2, 2014. As originally drafted and adopted in the spring of 2012, the orsa guidance manual provided guidance regarding the conduct, internal documentation and reporting on the orsa of the insurer andor the insurance group of which the insurer is a member. Naic guidance manual the naic has created an implementation. The naic in 2012 adopted a risk management and own risk and solvency assessment model act model act. This roadmap sets out the policy direction and priorities for smi activities. The following summarizes the most significant changes since the march 20 edition.
The term orsa guidance manual shall mean the current version of the. Orsa summary report, including any supplemental materials or followup questions provided orsa 2. The orsa subgroup submitted changes to the naic on its december 2012 draft, guidance manual for the own risk and solvency assessment, and included information on actuaries who are involved in enterprise risk management. Mistakes can occur at any point in a models life cycle from design through implementation. This ss should be read together with ss4115, solvency ii. Section 2729a5 effective january 1, 2017 orsa summary. The development of an orsa regulatory requirement in the us is consistent with broader regula. As adopted by financial condition e committee september. An overview of the requirements from a qualitative, quantitative and governance perspective was provided in the december edition of the financial reporter. The content of the international orsa regulatory requirements chart the chart has been provided by individuals at the request of the joint orsa subcommittee of the insurance regulation committee and the enterprise and financial risk committee of the iaa. The model act has been implemented by 34 states to date, although some of these states will not require the summary report to be filed until 2016 or 2017. The naics solvency modernization initiative smi began in june 2008. Distressed companies in rbc action levels may also be required to produce an orsa at the regulators discretion. Naic references the rims risk maturity model for orsa.
The national association of insurance commissioners naic is the statebased standardsetting organization governed by the chief insurance regulators from the 50 states, the district of columbia and five u. The following summarizes the most significant changes since the july 2014 edition. Christy neighbors, chair nebraska, group solvency issues e working group the national association of insurance commissioners naic group solvency issues e working group gsiwg sent out a revision of the naic own risk and solvency assessment orsa guidance manual the. Naic own risk and solvency assessment guidance manual overall, the orsa is essentially an internal. Ensuring readiness for the us own risk and solvency. Own risk and solvency assessment orsa presentations to occa nov. Naic model laws, regulations, guidelines and other resourcesoctober 2012. Academy comments on orsa guidance manual by lou baccam. Enterprise risk management american academy of actuaries. In 2012, as a component of a broad naic program known as the solvency modernization initiative, the naic adopted the model act. Naic model law adopted in september 2012 naic guidance manual revised march 20. With initial orsa filings not due for most states until 2015, the naic s orsa subgroup in the interim administered a pilot program to smooth out the orsa filing process for both industry. To address this, the naic has a website dedicated to providing the holder of this manual with the latest information impacting financial examinations.
392 1543 1604 362 1395 6 1516 1327 870 1341 836 688 1017 1397 679 121 1594 1299 1206 460 1441 379 1489 473 1094 354 678 1109 925 22 556 913 978 175 202 519 603 751 1103 1253 824 440 1121 114 592