What Does Own Risk and Solvency Assessment (ORSA) Mean?
Own risk and solvency assessment (ORSA) is an ongoing self-directed process undertaken by insurers and insurance groups to gauge the adequacy of their risk management and solvency conditions under both normal and severe stress scenarios.
An ORSA calls for insurers to analyze all reasonably foreseeable risks in all aspects of their operation — such as underwriting, credit, market, operations, liquidity — that could have an impact on their ability to meet their obligations to policyholders.
Not less than once a year, organizations must conduct an ORSA, document the process and furnish either the state insurance commissioner or regulator with a report. Insurers that write more than $500 million worth of premiums or groups that write more than $1 billion in premiums are required to participate. There are no rules about how insurers should conduct ORSAs or how the content of an ORSA report should be organized.