With the National Association of Insurance Commissioners' OwnRisk and Solvency Assessment (ORSA) regulation bearing down oninsurers, the IASA offered a super session, plus a trackof technical sessions, on complying with the new enterpriserisk-reporting mandate, to keep its members informed andupdated.

“We had it as a super session two years ago, and now a lot [ofthe regulation] has been implemented” by IASA members, particularlylarge companies, explains Dotti Augustine, chair of IASA'sAccounting, Risk Management and Finance Committee. Given the impactof the regulation, it's important to give IASA members a forum todraw from one another's knowledge and experience, says Augustine,director of client services at Aon Benfield.

“In the insurance industry, companies are very good at helpingclients manage risks, but doing it for themselves is a verydifferent task,” observes consultant Mary Peter, who will moderateand speak at the super session. Peter is director, enterprise riskmanagement, at Eide Bailly LLP.

Linda Conrad, director of strategic business risk management atZurich Insurance Co. Ltd., also is due to sit on the super sessionpanel. Her plan is to share the approach that Zurich has takenrecently to develop its ORSA report. “Zurich has all the pieces itneeds to write its report,” Peter asserts.

The NAIC in March finalized guidelines for the ORSA report,which large and mid-sized insurers must deliver by Jan. 1, 2015.Insurers must comply with the regulation if they meet certainannual direct written premium and unaffiliated assumed premiumthresholds: $500 million or more for individual insurers and $1billion or more for insurer groups.

At this point, insurers “need a plan” for setting out howdifferent risks impact their organizations across departmental anddivisional lines, says Peter.

Larger insurers like Zurich likely have committed more resourcesand time to developing their ORSA reports than have mid-sizedcompanies, “so a mid-sized market can learn from larger companiesif its own plan doesn't yet meet the ORSA requirements,” shenotes.

Still, some large companies have yet to fully resolve how tocomply with the new NAIC rule. This super session should beinstructive to them as well, says Peter. The super session willsurvey the issues insurers face in developing their individualreports, while each of the ARF Committee's six technical sessionson the regulation will dive deeper into the nitty gritty details ofthe new regulation.

Collectively, these sessions may prove valuable to insurers thatstill are deciding how to structure their reports, since templatesmay not be practical given insurers' varying risk profiles.

“Insurance companies are very diverse,” Peter explains. Some aresingle-line companies operating in one state, while others writemultiple lines across a region or nationally. Some are life/healthinsurers, and others are property/casualty companies. Many arefor-profit companies, but some are non-profits. In addition,insurers distribute their products and services in variousways.

“So how they manage those risks,” she says, “would varyconsiderably.”

To stay a step ahead of new regulations, insurers need to fullyunderstand the past and present while analyzing the future, sheasserts. “You just can't look in your rearview mirror. You have tohave a strategic plan that considers emerging risks and how fastthey're coming — whether you want to put on the brakes or speed upbecause you're comfortable managing your risks” and theopportunities they provide. “It's like looking through thewindshield of your car.”

Moreover, enterprise risk has to be analyzed both quantitativelyand qualitatively, Peter notes. Consider reputation risk. “It'svery difficult to quantify, but you know when it happens. Ifcontrols are in place to respond, you may be more nimble to respondto those issues and avoid a loss.”

What's more, how a company responds to the new regulatoryenvironment might ultimately provide it with a competitiveedge.