2015 marks the beginning of a new era of regulatory requirements for the insurance industry as many states have now adopted the Risk Management and Own Risk and Solvency Assessment (‘ORSA’) Model Act (#505).Qualifying insurance companies will need to present their own assessment of current and future risks through an internal self-assessment of risk.
Executive SummaryCarriers should keep their boards of directors in mind as they prepare ORSA Summary Reports, according to risk advisors from Oliver Wyman and Guy Carpenter. While ORSA is a regulatory requirement, regulators are not the real target audience. That's just one piece of advice they list in this summary of 10 tips for carriers as they work through the ORSA reporting process.
This self-assessment will provide regulators with an enhanced view of an insurer’s ability to withstand financial stress. This exercise is to be presented annually to the insurer’s lead regulator in the form of an ORSA Summary Report, with the first of these reports due late in 2015.
The ORSA Summary Report is new to both insurance regulators and qualifying insurance companies. To accelerate the learning curve, we suggest the following Insurer Do’s and Don’ts of the ORSA Summary Report.