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Foremost among the concerns enumerated by the AIA is the proposed Own Risk Solvency Assessment (ORSA) being crafted as part of NAIC’s solvency modernization initiative. Created to help harmonize U.S. solvency requirements with those pending in the European Union, ORSA is an internal evaluation by an insurer of its risk profile, in order to determine its ability to remain solvent under various scenarios. AIA is advocating for better utilization of the risk-focused examination process currently at hand and expresses privacy concern about wider dissemination of insurers’ confidential and proprietary information
“The ORSA proposal would create a new regulatory filing and should not be impulsively adopted,” Phil Carson, AIA assistant general counsel, said in a statement. “Enterprise risk management is a dynamic process that is best reviewed in conjunction with the NAIC’s existing Risk-Focused Surveillance Framework. Proponents of an ORSA filing requirement have failed to show a regulatory need and the statutory authority to require the submission of insurers’ confidential and proprietary information through a periodic filing.”
Closer to home, AIA opposes adding “claim denial” as a data element to the Market Conduct Annual Statement (MCAS), charging that the cost of adding the data point would outweigh any benefits once the money required to comply (new processes, training of personnel and reprogramming of systems) is considered.
“Addition of the proposed ‘claim denial’ data element to MCAS would add substantial costs for insurers and provide minimal value to regulators,” said Matt McKenney, AIA associate counsel. “AIA urges regulators to examine the costs of this proposal, relative to the regulatory need and in light of the substantial data already collected under MCAS.”
