NU Online News Service, Nov. 8, 12:53 p.m. EST

NATIONAL HARBOR, Md.—A manual to be used to implement the proposed Own Risk and Solvency Assessment (ORSA) requirement for property and casualty insurance holding companies has been sent up the ranks at the National Association of Insurance Commissioners meeting.

The NAIC's Solvency Modernization Initiative Task Force approved and sent up the proposal at the fall meeting here, but actual implementation of the ORSA manual appears to be far off since critical issues remain.

The industry contends that that regulators lack the legal authority to implement the ORSA requirement.

The proposal heads to the Financial Condition Committee for further action.

The industry supported the manual after winning changes in it, but was concerned about the appropriateness of the implementation method proposed by NAIC staff.

As proposed, it would have required insurers to include it as part of Form B, which must be filed by all insurers in a holding company with their domiciliary states.

Steve Broadie, vice president of financial policy for the Property Casualty Insurers Association of America, said PCI was “pleased” that the working group decided to reconsider adoption of the Form B approach at a recent meeting.

He said the industry will work with the NAIC to develop an appropriate implementation method.

The ORSA manual, if adopted by the NAIC and individual states, would apply the ORSA requirement to stand-alone insurers with premium exceeding the manual's exemption threshold.

The working group did accept some changes to the manual as requested by industry, which still remains concerned that the comment period was too short, and that the “potential for unintended consequences remain in the document.”

PCI is expected to ask the Task Force Saturday that if adopted, that it remain open for review and revision as needed.

But the Form B approach to implementation was a greater concern to industry.

Special Reports /

NAIC Meeting: ORSA Manual Progresses but Concerns Remain

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