The NAIC’s ORSA (own risk and solvency assessment) subgroup kicked off its second feedback pilot program this week by requesting summary reports with actual data from interested insurers and groups of a certain size.
The subgroup will accept 15-20 volunteer insurers/groups for the 2013 pilot project.
The subgroup today began the request of insurers and/or groups above the exemption threshold specified in the NAIC ORSA Guidance Manual to voluntarily provide a complete ORSA summary report for regulator review.
The exemption criteria for an individual insurer are annual direct written amounting to less than $500 million; and for an insurance group, less than $1 billion.
Interested insurers and/or groups should provide an email to Danny Saenz, Texas deputy insurance commissioner, by May 31, 2013, regarding their interest.
The 2013 pilot project is expected to provide additional observations and considerations to be included in such guidance to the involved NAIC working groups.
The ORSA Summary Reports will be collected and maintained on a confidential basis under Texas law.
The ORSA process is meant to be one element of an insurer’s broader enterprise risk management (ERM) framework. The ORSA and the ORSA summary report links the insurer’s risk identification, measurement and prioritization processes with capital management and strategic planning.
The ORSA subgroup had recommended key structural changes for the 2013 project including identifying components that should be included in all ORSA summary reports. These components include an explanation of the basis for the accounting method used in the report, a summary of material changes to the ORSA from the prior year, a comparative view of group risk capital from the prior year and syncing up the Manual with the already NAIC-adopted Risk Management and Own Risk and Solvency Assessment (RMORSA). The RMORSA, like the ORSA, is part and parcel of the NAIC’s broader Solvency Modernization Initiative (SMI).
All ORSA Summary Reports provided by Texas to subgroup members, designated NAIC staff and invited regulators will be destroyed either three days after the Financial Condition Committee receives its high-level summary report from the subgroup and/or soon after year-end 2013, whichever is later.