Home » 2014 Issues » June 25, 2014 » DFS-03-14-00014-A Enterprise Risk Management and Own Risk and Solvency Assessment
DFS-03-14-00014-A Enterprise Risk Management and Own Risk and Solvency Assessment
6/25/14 N.Y. St. Reg. DFS-03-14-00014-A
NEW YORK STATE REGISTER
VOLUME XXXVI, ISSUE 25
June 25, 2014
RULE MAKING ACTIVITIES
DEPARTMENT OF FINANCIAL SERVICES
NOTICE OF ADOPTION
I.D No. DFS-03-14-00014-A
Filing No. 481
Filing Date. Jun. 09, 2014
Effective Date. Jun. 25, 2014
Enterprise Risk Management and Own Risk and Solvency Assessment
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Addition of Part 82 (Regulation 203) to Title 11 NYCRR.
Statutory authority:
Financial Services Law, sections 202 and 302; Insurance Law, sections 110, 301, 309, 1109, 1115, 1501, 1503, 1504(c), 1604, 1702, 1717 and arts. 15, 16 and 17
Subject:
Enterprise Risk Management and Own Risk and Solvency Assessment.
Purpose:
To require ERM functions and ORSAs, and the filing of reports related thereto with the Superintendent.
Substance of final rule:
Section 82.1 sets forth definitions.
Section 82.2 provides that, pursuant to Insurance Law §§ 1503(b), 1604(b), and 1717(b), an entity (meaning an ultimate holding company that directly or indirectly controls an insurer or a domestic insurer registered or required to register under Insurance Law Article 16 or 17) must adopt a formal enterprise risk management (“ERM”) function. An entity must file annually with the Superintendent of Financial Services (“Superintendent”) an electronic copy of the enterprise risk report due in 2014. A domestic insurer that is not a member of an Article 15, 16, or 17 system must adopt an ERM function and file an annual enterprise risk report if its premiums are equal to or greater than a certain amount. Section 82.2 also sets forth the minimum requirements for an ERM function and specifies the items that must be included in an enterprise risk report.
Section 82.3 requires a domestic insurer to conduct an own risk and solvency assessment (“ORSA”), and permits a domestic insurer to satisfy this requirement if the holding company system, Article 16 system, or Article 17 system of which the domestic insurer is a member conducts an ORSA. Section 82.3 also requires such a domestic insurer to submit to the Superintendent, starting in 2015, an electronic copy of an ORSA summary report and one hard copy of the report due in 2015. Section 82.3 also describes which domestic insurers are exempt from the requirements of this section.
Section 82.4 states that an entity or a domestic insurer submitting an enterprise risk report or ORSA summary report may request trade secret protection under the Public Officers Law.
Section 82.5 permits an entity or a domestic insurer to apply to the Superintendent for an exemption from the electronic filing requirement by submitting a written request to the Superintendent at least 30 days before the due date of the particular filing or submission that is the subject of the request.
Final rule as compared with last published rule:
Nonsubstantive changes were made in section 82.2(b)(1).
Revised rule making(s) were previously published in the State Register on
April 30, 2014.
Text of rule and any required statements and analyses may be obtained from:
Joana Lucashuk, New York State Department of Financial Services, One State Street, New York, NY 10004, (212) 480-2125, email: joana.lucashuk@dfs.ny.gov
Revised Regulatory Impact Statement, Regulatory Flexibility Analysis and Rural Area Flexibility Analysis
Changes made to the last published rule do not necessitate revision to the previously published Regulatory Impact Statement, Regulatory Flexibility Analysis and Rural Area Flexibility Analysis for new 11 NYCRR 82 (Insurance Regulation 203).
The amendment to the adopted rule merely deletes language that requires an entity or domestic insurer to file with the Superintendent of Financial Services a hard copy of the enterprise risk report that was due April 30, 2014.
Revised Job Impact Statement
This rule should not adversely impact jobs or employment opportunities in New York State. With regard to Insurance Law Article 15 holding companies and domestic insurers that have subsidiaries, the rule merely implements Chapter 238 of the Laws of 2013 by expanding upon the statutory requirements for adopting an enterprise risk management (“ERM”) function and filing an enterprise risk report. These prudent requirements ensure the solvency and continued operation of insurers. For this reason, the rule also imposes ERM requirements on certain domestic insurers that are not part of an Article 15, 16, or 17 system and own risk and solvency assessment (“ORSA”) requirements on most domestic insurers.
Initial Review of Rule
As a rule that requires a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2017, which is no later than the 3rd year after the year in which this rule is being adopted.
