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The South African Insurance Industry Survey 2016 | 19

Country Feedback from regulators
Canada
–– Establish a robust target Leverage Ratio and
Feedback provided risk-based capital targets as part of the capital
by the Federal planning process.
Office of the
Superintendent of –– Include a timeline or an explanation should
Financial Institutions the institution’s Board-approved capital
(OSFI) in August target be lower than the International Capital
2015. Adequacy Assessment Process (ICAAP)
capital requirement.

–– Prudent capital management must take into
account different capital measures.

–– If risk capital allows for tax benefits, the full
impact on available capital must be included
under stress scenarios.

–– The quality of ORSA reports are expected to
improve over time, specifically in qualitative
assessment and risk quantification.

Concluding remarks “A new, dynamic risk management ‘centre piece’,
There is still a significant amount of work to be executed by all firms on their designed to capture key risk and solvency considerations -
journeys to fully meet ORSA requirements and enabling derivation of value from I refer, of course, to the ORSA. And these are just some
the ORSA process and its outcomes. of the myriad developments the industry has had
to embrace” Chris Moulder*
The FSB requires that all insurers must have their ORSA reports independently
reviewed. It is good practice to get it done in the early cycles and care must *Quotes taken from “Current regulatory issues and PRA expectations in current market conditions” – speech by Chris Moulder on 04 April 2016.
be taken when deciding who will perform the independent review. Currently,
most firms use their Internal Audit function to perform the reviews, but the
reviews can be performed by external parties. The benefit of choosing an
external reviewer may mean that companies are able to draw on a broader
knowledge base and better understand the ORSA best practice in the industry.
This is particularly important as focus changes from a compliance exercise to a
strategic value add to the business.