The NAIC ORSA does all of the following, EXCEPT:

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Multiple Choice

The NAIC ORSA does all of the following, EXCEPT:

The key idea is that ORSA is an internal, forward‑looking process that ties risk and solvency to governance. It requires management to identify material risks, assess their potential impact on solvency, and consider capital needs under current and forward-looking scenarios. Importantly, ORSA is not a rigid, one‑size‑fits‑all template; it is designed to be flexible and tailored to the insurer’s size, risk profile, and governance structure, with the results informing strategy, risk appetite, capital planning, and board oversight. Because of that flexibility, the notion of imposing a rigid structure does not fit ORSA. The other elements—internal risk assessment, integration of risk and solvency into governance, and encouragement of forward‑looking risk assessment—are consistent with how ORSA is intended to function.

The key idea is that ORSA is an internal, forward‑looking process that ties risk and solvency to governance. It requires management to identify material risks, assess their potential impact on solvency, and consider capital needs under current and forward-looking scenarios. Importantly, ORSA is not a rigid, one‑size‑fits‑all template; it is designed to be flexible and tailored to the insurer’s size, risk profile, and governance structure, with the results informing strategy, risk appetite, capital planning, and board oversight. Because of that flexibility, the notion of imposing a rigid structure does not fit ORSA. The other elements—internal risk assessment, integration of risk and solvency into governance, and encouragement of forward‑looking risk assessment—are consistent with how ORSA is intended to function.

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