Actuarial Notes

ORSA and the Regulator

By ORSA and the Regulator Working Group, American Academy of Actuaries · American Academy of Actuaries · 2016 · CFE101-103-25

Study guide: Exam CFE-101

A public policy overview that gives regulatory actuaries reviewing Own Risk and Solvency Assessment (ORSA) reports background on the enterprise risk management process and on what an ORSA report might contain. Dated February 2016, it was developed by the ORSA and the Regulator Working Group of the American Academy of Actuaries' ERM/ORSA Committee. Because ORSA reporting was new in the United States, it gives general information for the first several years of reviews and does not cover detailed quantitative ORSA topics.

On the syllabus

  • Exam CFE-101 — CFE101-103-25: ORSA and the Regulator; outcomes 1.2a, 1.2d, 1.3a, 2.1a, 2.2h, 3.1a, 3.3b, 3.3c.

Executive Summary

I ORSA and the Actuarial Perspective

  • ORSA Report Versus Other Required Regulatory Filings
  • Use of the ORSA in a Risk-Focused Examination
    • Insight on Risk Exposures
    • Insight on Capital Adequacy
  • Use of ORSA Reporting to Identify, Measure, and Mitigate Industry Risks

II Enterprise Risk Management (ERM)

  • Goals of ERM
  • Fostering Effective ERM in ORSA
  • Insurer Organizational Structure and Business and Strategic Planning
    • Organizational Structure
    • Business and Strategic Planning

III ORSA Report Elements

  • Description of the Insurer's Enterprise Risk Management Framework
    • Risk Culture and Governance
    • Risk Considerations in Strategic and Operational Planning
    • Management and Board Risk Committees
    • Risk Management Policies and Philosophies
    • Risk Appetite, Tolerances, and Limits
    • Risk Identification, Analysis, and Prioritization
    • Risk Management and Controls
    • Risk Reporting and Communication
    • Risk Framework Feedback Loop
  • Insurer Assessment of Risk Exposure
    • Estimating Risk Capital
    • Stress & Scenario Testing (SST)
  • Group Assessment of Risk Capital and Prospective Solvency Assessment
    • Prospective Capital and Solvency Assessment
    • Sources of Capital
    • Capital Measurement

IV Conclusion

Sources