Key challenges for implementation and differences to Solvency II ORSA
This report provides a summary of the Swiss ORSA requirements, highlights the key challenges for Swiss insurers and provided a comparison to the Solvency II ORSA.
05 August 2015
With the revision of the Swiss Insurance Supervision Ordinance in 2015, FINMA requires Swiss Insurers to conduct an “Own Risk and Solvency Assessment” (ORSA) in addition to the required reporting under the Swiss Solvency Test (SST). FINMA has subsequently introduced the ORSA with the release of a consultation paper on 8 July 2015 (Circular 2016/xx ORSA) which provides principle-based guidance. FINMA does not provide a detailed description on how to implement an ORSA but outlines the key requirements, leaving it up to insurers to define the ORSA process.
The definition and concept of the Swiss ORSA is largely consistent with the Solvency II ORSA, for example including that the ORSA should provide a forward-looking, consistent and global view of an insurer’s risk profile, that the ORSA is used as an integral part of the business strategy and that it has to be taken into account in the strategic decisions of the insurer.