Lee Resnick from Deloitte speaks with WRIN.tv about Own Risk and Solvency Assessment (ORSA) requirements as the deadline for compliance approaches, during a recent User Group Forum hosted by Ultimate Risk Solutions. ORSA requirements, which are promoted by the International Association of Insurance Supervisors (IAIS) and supported by the U.S. National Association of Insurance Commissioners (NAIC), require insurance companies to conduct internal self-assessments of risk. The NAIC Solvency Modernization Initiative requires large- and medium-size insurers in the U.S. to conduct regular ORSA starting in 2015.
According to Mr. Resnick, ORSA is attractive to regulators for assessing company solvency because it adds to existing solvency regulation. It enhances an insurance company’s ability to manage enterprise risk and capital needs in a continuous form of measurement. “ORSA and its accompanying enterprise risk management regulations … require companies to identify risk in a systematic way…The idea is to have insurance companies to have a continuous feedback mechanism that helps companies better manage their risks and the capital that they require.”
ORSA is going to create a challenge for Risk Managers because it requires a greater emphasis on a systematic approach to identifying risk, setting targets, and metrics for risk.
Mr. Resnick advises company executives to “start right away … and get the pieces together necessary to satisfy the complex (ORSA) requirements.
If you’d like more information about ORSA and financial risk modeling, visit the URS website, or WRIN.tv On Demand Library.
Via Kenneth Simon