Page 16 - MC14326 all pages

12 | The South African Insurance Industry Survey 2016 Progress of ORSA Requirements IntegrateVda,luSetr-aatdedgic tool,
Silos, Compliance tool
Governance of the ORSA Development
Position Paper (PP) 34 v5 states that:
2015 2016 2017
–– “The ultimate accountability of the ORSA resides
with the Board who should approve the ORSA.” Submission date for Submission date for Full ORSA compliance
When evaluating the ORSA, The Board and Senior first mock ORSA: updated mock ORSA: implementation date:
Management should: 31 August 2015 30 September 2016 1 January 2017

–– assess the adequacy of the current and future The aims of this ORSA The following are Compliance with all
solvency position; are: additional requirements relevant Guidelines (PP
Compliance to most of for the Mock ORSA 107 v6) will be required.
–– ensure that the ORSA is embedded in the business the 22 Guidelines (PP 2016*: Additional requirements
and decision-making processes; and 107 v6); • Document for 2017 cover these
• Design and areas*:
–– ensure that the ORSA assumptions, inputs and conclusions and • Board challenging
calculations are accurate and complete, through implement rationale;
direct review, challenge and reliance on the underlying • MI (Management and signing off on
governance process. processes Information), Use assumptions and
and produce and Embedding; methodology;
–– The ORSA should be appropriately evidenced and documentation • Deviations in risk • Out of cycle ORSAs;
documented. to comply with profile versus the and
the applicable SCR calculation; and • Independent
–– The ORSA document should be subject to an requirements; and • Requirement for a reviews.
independent assessment either internally (e.g. • To complete the Group ORSA.
Internal Audit) or externally and carried out by persons first full ORSA cycle If insurers do not yet
different to those performing the ORSA. and use the lessons comply, the amount
learnt to improve of work still to be
ORSA requirements 2015, 2016 and 2017 future cycles. completed is significant
The full set of ORSA requirements and guidelines are and complex.
set out in Position Paper (PP) 107 v6. Compliance with *Refer to the next page for the detailed updates.
the full set of ORSA principles and guidelines will be
required when the SAM framework is implemented.
This is currently scheduled for 1 January 2017.

Insurers were encouraged to make progress with a subset
of these requirements in 2015, and are urged to continue
to progress towards full compliance with the additional
requirements in 2016. Further requirements for the
‘Updated Mock ORSA’ were released on 31 March 2016.
While not unexpected, the requirements are significant in
terms of the time and effort involved. The bar expected by
the FSB is a lot higher than last year and will again be set
higher next year as highlighted in the diagram to the right.