Bill No.:         SF0021                                               Drafter: LGC

LSO No.:       14LSO-0053                                     Effective Date: 1/1/2015

Enrolled Act No.:    SEA0034

Chapter No.:                        CH0097

Prime Sponsor:       Joint Corporations, Elections and Political Subdivisions Interim Committee

Catch Title:              Insurance-own risk solvency model act.

Subject:                     Insurance regulation.

Summary/Major Elements:

· The Own Risk Solvency Model Act (ORSA) was developed by the National Association of Insurance Commissioners in order to comply with Insurance Core Principle (ICP) 16, which is an international standard that the U.S. will need to demonstrate compliance with during its Financial Sector Assessment Program (FSAP) review.  The FSAP Program is similar to the NAIC’s accreditation program, but on an international level.

· ICP 16 relates to the monitoring and evaluation of enterprise risk management.  During the previous FSAP review of the U.S. in 2008, the committee recommended that U.S. insurance regulators strengthen their focus on monitoring insurance companies’ risk analysis and mitigation strategies due to the issues that were noted with AIG and its affiliates during the 2008 financial crisis.

· This bill:

· Requires insurers and insurance groups meeting certain premium thresholds to conduct an annual ORSA review and submit a confidential ORSA Summary Report to the commissioner.

· Provides for an ORSA Guidance Manual.

· Provides for the sharing of ORSA information with other regulators as long as confidentiality is maintained.