The NAIC Releases Draft ORSA Model Act for Public Comment

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On April 4, the National Association of Insurance Commissioners (NAIC) Group Solvency Issues (E) Working Group released a draft Own Risk and Solvency Assessment (ORSA) Model Act (the ORSA Model Act) for public comment. Comments on the ORSA Model Act are due by the close of business on Friday, May 11. A copy of the ORSA Model Act is available. The ORSA Model Act is currently proposed to become effective on January 1, 2014.

The ORSA Model Act requires all insurers meeting certain size thresholds and their “insurance groups” (which are defined to include those insurers and affiliates in an insurance holding company system) to conduct an ORSA, in accordance with the NAIC ORSA Guidance Manual, annually. The NAIC adopted its ORSA Guidance Manual (which provides insurers and regulators with guidance on what an ORSA should entail and what an ORSA Summary Report should address) during the NAIC's 2011 Fall National Meeting. An insurer’s ORSA must be appropriate to its “nature, scale and complexity.”

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Published In: Administrative Agency Updates, Finance & Banking Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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