On Wednesday, September 12, 2012, the NAIC adopted the Risk
Management and Own Risk and Solvency Assessment Model Act (Model
Act). The Model Act was produced by the NAIC's Group Solvency
Issues (E) Working Group after several months of drafting, with
input from insurance industry trade groups, and a month-long
comment period. The NAIC believes the Model Act should satisfy
insurers' concerns regarding the confidentiality of risk
assessments and bring the U.S. insurance regulatory system into
equivalence with the European Union's Solvency II regulations.
The Model Act will become effective in 2015, and the first reports
would be required that year.
Under the Model Act, insurers must maintain a risk management
framework to "assist the insurer with identifying, assessing,
monitoring, managing, and reporting on its material and relevant
risks." The Model Act allows this risk assessment to be done
at the group level for all members of the group as well. Insurance
groups
