Description: Essay on the role of Risk Appetite, Economic Capital and Stress Testing in developing an effective capital budgeting process as part of the Own Risk and Solvency Assessment. Part of the essay collection "Risk Metrics for Decision Making and ORSA"

Description: The National Association of Insurance Commissioners (NAIC) is moving forward to implement a new regulatory requirement that requires U.S. insurers to perform an Own Risk and Solvency Assessment (ORSA). Before developing a response to the ORSA requirement, insurers will want to understand its genesis and the underlying rationale for it, as well as its implications. This essay provides an overview of the evolution and rationale for ORSA, as well as practical implications for insurers as they begin to design an ORSA process. Part of the essay collection "Risk Metrics for Decision Making and ORSA"