ORSA is Coming
Governor Scott has signed SB 1422 into law, meaning that Florida has adopted the Own-Risk and Solvency Assessment (“ORSA”) reporting requirement. SB 1422 is now known as Chapter Law 2016-206. A companion bill, SB 1416 (now known as Chapter Law 2016-205), provides for the confidentiality of information contained in the ORSA reports.
An Own-Risk and Solvency Assessment is an internal assessment, appropriate to the nature, complexity, and scale of an insurer or insurer group, of the material and relevant risks associated with the business plan of the insurer or group and the sufficiency of capital resources to support these risks. Each insurer subject to the requirement will be required to maintain a risk management framework for identifying, assessing, monitoring, managing and reporting material and relevant risks.
An insurer subject to the law will be required to conduct an ORSA at least annually, and whenever there are changes to the risk profile of the insurer or group. The insurer will be required to submit an ORSA summary report each calendar year. The insurer must notify the Office of Insurance Regulation by December 1, 2016, of its selected annual submission date and must submit its initial ORSA summary report by December 31, 2017. The report will be signed by the insurer’s chief executive officer or chief risk officer.
The new law contains several exemptions, most notably for an insurer with less than $500 million in written premiums or for members of an insurer group with less than $1 billion in written premiums. The law also allows the OIR to require an exempt insurer to file an ORSA report in certain circumstances.