The following summarizes the most significant changes since the march 20 edition. As the process and results are likely to include proprietary and forwardlooking information, any orsa summary report submitted to the commissioner shall be confidential by state. Orsa orsa guidance manual adopted and model act requested. Pursuant to the orsa guidance manual and the risk management and own risk. Naic orsa guidance for financial analysts examiners may provide insight into orsa process. Guidance manual shall be effective on the january 1 following. Act the orsa model act, which, if adopted by the states. Section 2729a5effective january 1, 2017 orsa summary report. Added to the general guidance section clarification that the foundation of the orsa summary report. The national association of insurance commissioners own risk and solvency assessment orsa guidance manual states. Illinois general assembly full text of public act 0980910. A fiurry of announced transactions in december 2012 ended what had. Naic own risk and solvency assessment orsa guidance. Naic orsaguidance manualmodel act second pilot implementation china circ riskbased solvency framework erm guidelines implementation japan fsa orsa no guidance yet first risk report.
It sets out the prudential regulation authoritys pras expectations of firms regarding their own risk and solvency assessment orsa. An insurer that is subject to the orsa requirement should consider the guidance provided in this manual when conducting its orsa and compiling its orsa summary report. March 2012, provides information for insurers on performing its orsa and documenting risk policies and procedures. The united states is no exception, with the naic including the orsa as part of its solvency modernization initiative smi. Osfi also recently provided an update on the progress it is making on implementing the life insurance regulatory framework published in september 2012, including revised timelines. Naic model insurance holding company system regulatory act. January 1, 2015 a new regulatory requirement intended to. One of the naics goals is to avoid creating duplicative regulatory requirements for internationally active insurers. Orsa summary report must be consistent with orsa guidance. Bermuda monetary authority bma their orsa fillings by april 30, 2012. 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. 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.
Own risk and solvency assessment orsa presentations to occa nov. Orsa regulations and guidance, such as the naics guidance manual in the u. 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. 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. Insurance commissioners naic, federal reserve board. Core principles, standards, guidance and assessment methodology, which was issued by the. The naic risk management and own risk and solvency.
Distressed companies in rbc action levels may also be required to produce an orsa at the regulators discretion. A change in the orsa guidance manual shall be effective on the january 1 following the calendar year in which the changes have been. In order for insurance companies to ensure compliance with the orsa regulation as it relates to model validation, insurers can look to guidance from. Solvency ii own risk and solvency assessment orsa what is orsa. The following summarizes the most significant changes since the july 2014 edition.
Naic references the rims risk maturity model for orsa guidance. Orsa guidance manual means the current version of the own. At its 2012 spring meeting, the naic adopted its orsa guidance manual the manual. Jul 29, 2015 enterprise risk management beginning april 2015, 36 states will require form f to be filed the enterprise risk report and controlling person requirements requirements for filing of form m orsa model risk management for insurance companies requirements from the orsa summary report for your model risk management mrm programs seeking guidance from the office of. This edition of the naic own risk and solvency assessment orsa guidance manual has been revised from the previous edition. The emphasized language in the model act, which would have created a blanket privilege for information collected in the orsa process, has led to a significant concern in the insurance industry.
The term orsa guidance manual shall mean the current version of the own risk and solvency assessment guidance manual developed and adopted by the national association of insurance commissioners naic and as amended from time to time. Ermorsa committee comments to the naics financial regulation standards and accreditation f. 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. Naic orsa guidance manual to determine if additional information is needed. December 9, 2011, fio hosted a conference at the treasury where participants. 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. Orsa information sharing best practices confidential information includes.
Image courtesy of 2010 national association of insurance commissioners 7. Orsa summary report, including any supplemental materials or followup questions provided orsa 2. Naic model law risk management and own risk and solvency assessment. Enterprise risk management erm, orsa and naic corporate. Title vii of the doddfrank act sets out a series of reforms for derivatives. 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. Canada osfi orsa guidanceconsultationfinal guidelines implementation u. Risk management and own risk and solvency assessment. Europe solvency ii orsa eiopa guidance pilots interim orsa solvency iiimplementation. Sb 76 sb 76 creates the risk management and own risk and solvency assessment act. Model risk management for insurance companies insurance companies are being required to implement a model risk management mrm program. The naic adopted the risk management and own risk and solvency assessment rmorsa model act on september 12, 2012. Guidance manual pilot exercise participation group capital metrics. A component of the insurers enterprise risk management erm.
The purpose of this manual is intended to provide guidance to an insurer andor the insurance group herein referred to as insurer or insurers with regard to reporting on its own risk and solvency assessment orsa as outlined within the form b insurance holding company. 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. Apr 16, 2015 naic references the rims risk maturity model for orsa guidance by steven minsky on april 16, 2015 12. This supervisory statement ss is addressed to all uk firms that fall within the scope of solvency ii, and the society of lloyds. Comments on the proposed model act are due to naic staff by the close of business on may 11, 2012. Working group on the form f guidance manual exposure draft. 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. Namic our positions own risk solvency assessment orsa. 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. Naic orsa and risk capital casualty actuarial society. 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. Foster effective enterprise risk management provide a group level perspective on risk and capital required of.
Enterprise risk management american academy of actuaries. Naic orsa and risk capital southern california casualty actuarial club winter 2014 meeting. Europe solvency ii orsa eiopa guidance pilots interim orsasolvency iiimplementation. Regulatory bodies naic own risk solvency assessment orsa. The american academy of actuaries mission is to serve the public and the united states actuarial profession. The office of the comptroller of the currency occ 20112012 guidance federal reserve board. The state legislative process is still ongoing, but we can anticipate the regulation to be fully in place in 2015. Orsa manual progresses but concerns remain a manual to be used to implement the proposed own risk and solvency assessment orsa requirement for property and casualty insurance. Improve your overall compliance and control efforts now. 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 the assessment.
In september 2012, the national association of insurance commissioners adopted the risk management own risk solvency assessment rmorsa a. Naic orsa guidance for financial analysts examiners may. The naic adopted the risk management and own risk and solvency assessment rmorsa model act on. In 2019, the organization continued to make great strides on delivering on the policy priorities set by our members, our cultural and operational transformation and. Naic references the rims risk maturity model for orsa guidance by steven minsky on april 16, 2015 12. Pursuant to the naic orsa guidance manual and the recently adopted risk. Apr 16, 2015 the rims risk maturity model, codeveloped by logicmanager ceo, steven minsky, and the rims risk management society, has been adopted by yet another governance body in an attempt to formalize how organizations achieve risk management competency. In this bulletin, we set out what federally regulated insurers need to know about these guidelines, as well as some of their history.
Ermorsa committee comments to the naics group solvency issues e working group on the form f guidance manual exposure draft. Developments in credit risk management across sectors bis. Under the model the commissioner can request an annual filing of orsa summary reports. Users of the naic own risk and solvency assessment orsa guidance manual.
Naic references the rims risk maturity model for orsa. Orsa guidance manual the current version of the orsa manual developed. The exposure draft comment period ends on may 2, 2014. Naic orsa regulation risk management and own risk and solvency assessment model act based on the eu solvency ii directive assess risk specific to the insurer assess solvency in a continuous and prospective way focus on stress scenario testing transparency annual confidential 5.
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. The actuarys role in the orsa visesh gosrani, barbara illingworth own risk and solvency assessment. Canada osfi orsa guidance consultationfinal guidelines implementation u. Risk and solvency assessment guidance manual developed and. The orsa model act details the requirements for completing an annual orsa and provides guidance and instructions for filing an orsa summary report with a u. 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 orsa guidance manual regulatory expectations us pwc 9 march 12, 2014 pwc progress in the industry most have developed a clear understanding of the orsa requirements of the report that needs to be produced. The own risk and solvency assessment orsa a regulatory. Orsa model act which is now an accreditation standard for all states to enact by 1118. Current insights for orsa implementation april 23, 215. Twentyone us insurers have volunteered to take part in the national association of insurance supervisors naic orsa pilot. The rims risk maturity model, codeveloped by logicmanager ceo, steven minsky, and the rims risk management society, has been adopted by yet another governance body in an attempt to formalize how organizations achieve risk management competency. Orsa main aim is to identify where actuaries can play a role in the orsa process supplementary purpose is to provide guidance to actuaries tasked with establishing an orsa process although a giro working party, membership includes actuaries working in life and nonlife companies and the fsa contact. Assessment orsa as required by solvency iis pillar 2 or the naic in the united states. Naic own risk and solvency assessment orsa guidance manual. This text is still under consultation, but can anticipate the impact of level 3 measures on the orsa. Documentation and supporting information must be maintained and made available upon examination or upon the request of the commissioner.
Risk management and own risk and solvency assessment act. Enterprise risk management beginning april 2015, 36 states will require form f to be filed the enterprise risk report and controlling person requirements requirements for filing of form m orsa model risk management for insurance companies requirements from the orsa summary report for your model risk management mrm programs seeking guidance from the office of. Naic orsa overview orsa own risk and solvency assessment naic model law adopted in september 2012 naic guidance manual revised march 20 effective date. Operational risk 20121218 lehrstuhl fur versicherungswirtschaft. All insurers to complete their first orsa by december 31, 2014. Naic model law adopted in september 2012 naic guidance manual revised march 20. The national association of insurance commissioners naic today released its 2019 annual report. Users of the naic own risk and solvency assessment orsa guidance manual from.