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Solvency II: Pillar 2 – ORSA


Published: 14 June 2023

Under Solvency II insurers are obliged to submit the results of their Own Risk and Solvency Assessment (ORSA) to the supervisory authority at least once a year. The ORSA gives the insurer and its stakeholders information about how strategy takes account of material risks that may threaten the insurer, the possible impact of this on its financial position and what the insurer can do to deflect or mitigate risks.


Every insurer who falls under Solvency II must prepare an ORSA report at least once a year and submit it to De Nederlandsche Bank (DNB).

No prescribed form

There is no prescribed form for an ORSA report. Insurers are therefore free to decide how to structure the report. This will enable them to tailor it to the requirements of their own business operations. However, there are a number of elements which an ORSA report must always contain.

Required elements

The insurer assesses its own risks and solvency in an ORSA report. Subjects that must in any event be covered are:

  • the overall solvency needs;
  • the continuous compliance with the prescribed capital requirements;
  • the continuous compliance with the prescribed requirements regarding technical provisions;
  • the significance of any deviation in the insurer’s risk profile from the assumptions underlying the solvency capital requirement (‘appropriateness of the standard formula’).

No calculation of regulatory requirement

The assessment of own risks and solvency is not intended to enable the insurer to calculate its own regulatory capital requirement. The regulatory capital requirement may be changed only in relation to the requirements of the standard model by an approved (partial) internal model or by means of a capital add-on. However, the ORSA does provide stakeholders with additional information about any discrepancies between the regulatory requirement and the solvency needs as assessed by the insurer itself.

Parties involved

Both the management board and the internal audit department of the institution must be involved in drawing up the ORSA and must be aware of all material risks to which the institution is exposed. The board is responsible for directing the process of conducting the ORSA and ensuring that the assessment is in keeping with the institution’s general strategy and any risk control strategies.

Relevant articles from the Solvency II directive are:

Article 45- ORSA

Relevant articles from the Delegated Regulation are:

Article 306: ORSA report

Relevant EIOPA guidelines are:

Guidelines on own risk and solvency assessment

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