Nearly six in ten financial professionals question whether their software tools can handle future regulatory compliance needs, according to a new survey.
StoneRiver Inc., Oakland, Calif., published this finding in the technology company’s second annual Financial Regulatory Survey. The report gauges financial professionals’ opinions about regulatory and accounting-related issues within the insurance industry.
The research results reflect the responses from 68 individuals, representing a mix of property/casualty, life, health, workers' compensation insurance companies, as well as reinsurance companies.
The study finds that nearly 60% of respondents expressed doubt about the readiness of their current software and tools to handle compliance requirements relating to the International Financial Reporting Standards (IFRS) and Own Risk and Solvency Assessment (ORSA).
Most respondents, the survey says, have not yet had the time to analyze the Reinsurance Model Revisions, but 22% express apprehension about having regulators approving jurisdictions and assigning insurer ratings.
Once ORSA requirement are finalized and assuming they apply to the company, 44% of respondents say they have the in-house expertise and would not use outside consulting services. A like number indicated they would seek external assistance.
Primary information sources for ORSA would be current consultants (CPAs, actuarial firms, etc.) for nearly 42%, while 49% indicate they would rely on the NAIC. The remaining 9% would split between IASA and other sources.
Approaches to a transition to the IFRS, should it become a requirement, vary greatly, with almost 30% noting they would “learn as we go,” the survey says.
“Responses to some of the survey questions were not surprising, but they were disheartening,” says Connie Jasper Woodroof, StoneRiver’s liaison to the NAIC. “In today's business atmosphere, a company needs to stay current on looming regulatory issues so the organization can move ahead with a plan when those regulations go into effect."
The survey says that half of respondents have an ERM process, although 23% indicate the reporting process is not formal. An additional 12% are in the process of developing an ERM process.
The full survey can be found here.