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The report underlines the purposes of the ORSA and provides additional details on how the ORSA is to be interpreted. Undertakings are expected to have the necessary competence and expertise to find fit-for-purpose solutions for the practical implementation of the ORSA.
EIOPA points out that one key feature of the ORSA is proportionality. Insurers should develop their own ORSA processes that are tailored to fit into their organisational structure and risk management system with appropriate and adequate techniques to assess the company’s overall solvency needs.
The undertaking’s administrative, management and supervisory body (AMSB) needs to play an active role in the ORSA, particularly by steering on how the assessment is to be performed and by challenging its results.
Undertakings should express the overall solvency needs in quantitative and qualitative terms and complement the quantification by a qualitative description of the risks. Insurers will be required to submit to the NSAs a forward-looking assessment of their overall solvency needs indicating multi-year tendencies and developments.
EIOPA strongly encourages the industry to use the current report in their early implementation of the ORSA.