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

NATIONAL HARBOR, Md.—A manual to be used to implement theproposed Own Risk and Solvency Assessment (ORSA) requirement forproperty and casualty insurance holding companies has been sent upthe ranks at the National Association of Insurance Commissionersmeeting.

The NAIC's Solvency Modernization Initiative Task Force approvedand sent up the proposal at the fall meeting here, but actualimplementation of the ORSA manual appears to be far off since critical issuesremain.

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

The proposal heads to the Financial Condition Committee forfurther action.

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

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

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

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

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

The working group did accept some changes to the manual asrequested by industry, which still remains concerned that thecomment period was too short, and that the “potential forunintended 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 concernto industry.