Is your enterprise risk management program ready for ORSA?
WHITE PAPER |
This white paper provides an overview of enterprise risk management (ERM) and the associated report on a company's Own Risk and Solvency Assessment (ORSA) process, a significant new requirement within U.S. insurance regulations. Specifically, this white paper reviews the three ORSA report sections as required under the National Association of Insurance Commissioners (NAIC) ORSA Model Act, and the content that is expected to be presented in each section.
The ORSA process offers benefits beyond just compliance. When fully developed, a strong ORSA process will directly link ERM into the strategic and financial planning process of the organization, and allow for more informed decisions by management as they attempt to optimize the balance between risk and reward. And, although not required for all insurers, regulators and rating agencies will consider ORSA a business discipline that mitigates risk and improves business performance.
While the ORSA process is challenging and complex, having a strong ORSA process strategically linked with your ERM efforts offers benefits beyond mere compliance fulfillment. Done in an optimal way, a regularly updated ORSA can provide you with an integral tool and resource to better understand how decisions you make could ultimately impact the financial health of your business now and for years to come.