NAIC Group Solvency Issues Working Group: Comments on Own Risk and Solvency Assessment Model Act (ORSA) Due Friday, July 13
Jul 10, 2012
The National Association of Insurance Commissioners (“NAIC”) Group Solvency Issues Working Group (“Working Group”) met via conference call on June 29, 2012, during which members discussed revisions to the NAIC’s draft Own Risk and Solvency Assessment Model Act (“ORSA”).
The Working Group, which assists the Assist the NAIC’s Solvency Modernization Initiatives Task Force, is developing ORSA as a regulatory resource to assess and monitor insurers’ risk management processes.
During the meeting discussion, it was noted that, for purposes of the draft ORSA Model Act, the term “risk management framework” should not be tightly described, but rather should be defined in a way that would allow for flexibility.
It also was noted that the section of ORSA relating to confidentiality mirrors the confidentiality section of the NAIC’s Insurance Holding Company Model Act. Additionally, the section relating to sanctions also is based on a similar provision in the Insurance Holding Company Model Act.
In their comments on the ORSA draft, insurance industry representatives expressed that the section on sanctions seems somewhat extreme. While penalties are an appropriate regulatory tool, they argued, the civil forfeiture provision and criminal proceedings are not.
Among the provisions of the draft is a requirement for an ORSA summary report to be submitted to a regulatory agency. It was noted that requiring the report to be notarized was “a bit strong,” and that perhaps the person submitting the report should submit an attestation instead. It was suggested that language should be included to specify what the person was attesting to.
The Working Group decided to offer the most recent ORSA version for further public comments, which will be accepted until Friday, July 13, 2012.
To access the most recent ORSA draft, click here.
With no further business before the Working Group, the meeting was adjourned.
Comments received on the May 11, 2012 ORSA draft are accessible through the hyperlinks below. The June 29 meeting materials are attached for review.
- Joint Trade Letter and Changes Combined
- North American Chief Risk Officer’s (CRO) Council
- New York Comments on Draft ORSA Model Act
- Virginia ORSA Comments
- PCI ORSA Model Law Comment Letter
- American Academy of Actuaries Comments
Should you have any questions or comments, please contact Colodny Fass& Webb.
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