Filed Under:Agent Broker, Coverage Issues

Clean Out the Regulatory Attic

ORSA represents a shift in both the substance and timing of a regulatory filing.

By now you have probably heard about the pending new Own Risk and Solvency Assessment (ORSA) that’s making its way through the National Assn. of Insurance Commissioners’ process.

ORSA  is a departure from the traditional box-checking, number-crunching approach to most regulatory requirements. It is an enterprise risk management approach to regulation that captures information that companies are already producing for internal purposes. This new filing will be required only for companies with more than $500 million in direct written premium.

ORSA represents a shift in both the substance and timing of a regulatory filing. Where most information now required is backward looking—financial results and annual statement information from last year—ORSA will require risk models, business plan information and growth initiatives for the coming year.

Earlier this year, NAIC conducted a pilot project where 13 anonymous insurance companies voluntarily provided summary reports. Only eight submitted reports deemed sufficiently complete, an impending ORSA requirement (although five of these reports included some data fields that were redacted).

NAMIC and others in the property-casualty industry have been advocating some key provisions  in the current model: the compliance threshold, and ensuring confidentiality protections given the proprietary nature of most ORSA information. We were successful in accomplishing those objectives, and while we’re not applauding the creation of a new regulatory requirement for our members, stopping this proposal has not been an option.

ORSA provides us with an opportunity as well. Assuming states enact the model over the next year or two, the first reports will be due in 2015. Anticipating that action, we now have leverage to make a case for doing away with some of the old requirements of questionable value.

One of the regulators at the recent NAIC meeting in Atlanta called ORSA a "regulatory game changer," which  it may well be. NAMIC aims to hold regulators to that standard. Part of the game that has to change is the silly "ticking and tying" too often associated with regulatory requirements.

In order to survive, state regulation must be rational, efficient and focused. It may sound naïve to expect anything different from the bureaucracy, but NAMIC will work to make the case—and we’ll use ORSA as an opportunity to change the game.

Featured Video

Most Recent Videos

Video Library ››

Top Story

5 things to know about the NAIC's new cybersecurity model law

The NAIC's newly-adopted Insurance Data Security Model Law provides guidance for carriers, agents, brokers and their business partners.

Top Story

5 insurance advisor marketing mistakes to avoid

The right marketing tactics can help insurance agents and brokers reach their goals.

More Resources


eNewsletter Sign Up

Agent & Broker Insider eNewsletter

Proven success tips and essential information to help agents and brokers grow their practice – FREE. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.