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ORSA requirements: Model risk management for insurance companies

Insurance companies are being required to implement a model risk management (MRM) program. The National Association of Insurance Commissioners' Own Risk and Solvency Assessment (ORSA) guidance manual states: "The ORSA summary report requires insurers to provide a general description of the insurer's process for model validation, including factors considered and model calibration." In addition, the guidance also notes, "One of the most difficult exercises in modeling insurer results is determining the relationships, if any, between risk categories."

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