Non-Technical Guide Series - Qatar - ORSA

A non-technical guide to ORSA Requirements in Qatar

JABRAN NOOR, FSA FIA

Executive Director - Actuarial & Risk Management

Tajweez Advisory

tajweezactuarial.com

NON-TECHNICAL GUIDE SERIES

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NON-TECHNICAL GUIDE SERIES

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3.

1. What is ORSA?

ORSA Report

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ORSA Requirements

4. Our Services

Implemented the Own Risk and Solvency Requirement (ORSA) in 2015.

Companies have to comply with QFC PINS Part 2.4 requirement starting year end 2015

QATAR

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Tajweez Advisory CO WLL - ORSA Requirements in Qatar - Jabran Noor

What is ORSA?

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2015

adequacy of an insurer’s risk management policies, procedures and controls

insurer’s present and future solvency positions

Detailed forward looking assessment of

2015

“Own” solvency assesment - current & future

Management of material risks

Identify potential business vulnerabilities

Objectives


What is ORSA?

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1. What is meant by “Own” in ORSA?

The assessment of risk and solvency under ORSA is made by the Company itself as oppossed to any pre-defined standard. Because ORSA is a part of company’s risk management strategy, the company should have regard to the other factors included in that strategy, including risk profile, tolerance and exposure while conducting ORSA.

2. Is ORSA a management tool or supervisory tool?

ORSA is both a mangement tool and a supervisory tool. In order to gain full advantage of ORSA, companies should embed it within the decision making procedure. It should be robust enough to provide confidence to the Company and the Regulator that the Company has the ability to remain solvent in face of risks faced by it. ORSA should be adequately documented in order to satisfy the regulator.


What is ORSA?

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3. What is meant by “forward looking” ?

ORSA is not a performance measurement tool evaluating the past performace of the Company. Instead it projects the ability of the Company to meet current and future capital adequacy, manage material risks and helps in identifying future vulnerabilities.

4. ORSA is just a fancy name for Financial Condition Report?

ORSA is unique because it encourages the management to consider risk management not as a compliance exercise but as a management tool. Companies are encouraged to anticipate potential capital needs and take actions before it is too late.

ORSA is not a one-off exercise. It is a continuous evolving process and should be a component of Company’s Enterprise Risk Management. Furthermore, ORSA is not an assessment of the actuary but the Company itself.


What is ORSA?

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its overall solvency needs

own view of capital adequacy

actions taken for management of risks

financial resources needed to manage business prudently and to meet minimum capital requirements

nature and quality of capital resources needed

impact on solvency of reasonably foreseeable change in risk profile

multi-period assessment of solvency, minimum capital and business continuation

In ORSA, Insurer must consider


What is ORSA?

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2015

Stress Tests

Occurance of extreme events

unlikely but possible adverse scenarios that would disrupt insurer’s business model

Quantitative Evaluation

0

7.5

15

22.5

30

0 Q1Y1 Q2Y1 Q3Y1 Q4Y1 Q1Y2 Q2Y2 Q3Y2 Q4Y2

7 7 7 7 7 7 7 7 7

2119

10

14 13 12 11 12 11

2119 20 21

25 25 2426

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Normal Environment

Stressed Environment

Risk Tolerance

Time Period


ORSA Requirements

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QFC Entity should carry out ORSA annually.

Assessment appropriate to nature, scale and complexity of insuer’s business

Financial resources needed to manage business prudently and to meet minimum capital

requirements under range of scenarios


ORSA Requirements

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Methods will differ between insurers, ranging from simple to complex

Insurers will have to make own judgement about complexity, stress tests, assumptions etc.

Insurers are expected to be transparent in their approach and maintain auditable records

Practical Considerations


ORSA Report

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2015After conducting the ORSA, insurer must prepare a report that includes a statement that

the board of the insurer participated in the assessment and approved the report.

Insurer must provide a revised ORSA report if the circumstances or risk profile of the

insurer changes

Regulator may ask for revised report in case the methodology is not robust


Our Services

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Gap Analysis

Development of Models

ORSA Compliance Report

ORSA Documentation

Facilitate Implementation

Stochastic Modeling

• The guide has been prepared to describe the regulation in a simple manner. It is in no means a substitute to the original regulation.

• No liability is assumed regarding the accuracy of the information contained. We welcome your feedback on any aspect of the report.

• The report should not be reproduced , published or disseminated, in part of full, without explicit permission of Tajweez Advisory.

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Information Usage

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Jabran Noor, FSA FIA Executive Director -

Actuarial & Risk Management

[email protected]

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Non-Technical Guide Series - Qatar - ORSA

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