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Operational Risk Management – Key Shifts Required to Rise to the Challenge blog

By Brian Barnier, OCEG Fellow

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Objectives Of The Dodd-Frank Act (November 2010) resource Articles OCEG Reviewed

Introduction: President Barack Obama signed the Dodd-Frank Act into law on 21 July 2010. The main objective of the Act is to avert a repeat of the 2008 financial crisis by making financial institutions more accountable for their actions and by enhancing oversight of the industry to detect and prevent systemic risk before it reaches crisis level.

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European Commission: Solvency II resource Agency Web Sites OCEG Reviewed

'Solvency II' will introduce economic risk-based solvency requirements across all EU Member States for the first time. These new solvency requirements will be more risk-sensitive and more sophisticated than in the past, thus enabling a better coverage of the real risks run by any particular insurer.

Solvency I

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Consultation Paper on Corporate Governance Regulations and Guidelines, Monetary Authority of Singapore, March 2010 resource Standards and Guidelines OCEG Reviewed

Consultation Paper P006 - March 2010

Preface: This consultation paper sets out proposed changes to the Banking (Corporate Governance) Regulations 2005 (the “Banking Regulations”) and Insurance (Corporate Governance) Regulations 2005 (the “Insurance Regulations”), collectively termed as the “Regulations” in this paper, and Guidelines on Corporate Governance (the “Guidelines”).

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UK, Association of Insurance and Risk Managers (AIRMIC) resource Organizations & Associations OCEG Reviewed
AIRMIC has a membership of nearly 850 and represents the insurance buyers for about 75% of the FTSE 100, as well as very substantial representation in the mid 250 and other smaller companies. AIRMIC members control about £5 billion annually of insurance premium spend. A further £2billion of premium spend is allocated to captive insurance companies within member organisations. Additionally, members are responsible for the payment of insurance claims from their company finances to the value of at least £2 billion per year.
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Protecting Your Capital Against Risk (2007) resource Articles OCEG Reviewed

ERM is a decision-making process based on principles of risk and reward that spans across all of the firm's operations. When implemented effectively, ERM ensures appropriate capitalization and provides for controlled risk-taking. It positions the firm to take advantage of attractive business opportunities while at the same time identifying and avoiding unattractive pursuits.

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IRS, Notice of Proposed Rulemaking - Medical and Accident Insurance Benefits Under Qualified Plans (August 20, 2007) resource National Regulations Member contributionOCEG Reviewed
SUMMARY: This document contains proposed regulations under section 402(a) of the Internal Revenue Code (Code) regarding the tax treatment of payments by qualified plans for medical or accident insurance. These regulations would affect administrators of, participants in, and beneficiaries of qualified retirement plans. This document also provides notice of a public hearing on these proposed regulations.
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Planning For Risk; Analysis Of Risk Management (2007) resource Articles Member contributionOCEG Reviewed

Planning is one of the most important functions for any manager. The risk manager helps the organization achieve its goals by synchronizing the risk management goals with all other goals and strategies. A problem is that there are so many types of risk that it may appear almost impossible to include them all in the organization's plans.

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Overview of Enterprise Risk Management (2003) resource White Papers Member contributionOCEG Reviewed

Organizations have long practiced various parts of what has come to be called enterprise risk management. Identifying and prioritizing risks, either with foresight or following a disaster, has long been a standard management activity. Treating risks by transfer, through insurance or other financial products, has also been common practice, as has contingency planning and crisis management.

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Enterprise Risk Management Can Help U.S. Commercial Lines Insurers Ward Off Irrational Pricing (S&P, 2007) resource Research / Studies Member contributionOCEG Reviewed

Standard & Poor's considers the ability of insurers to understand and manage their risks to be of increasing importance in the intermediate term. Although pricing is a key consideration in the enterprise risk management (ERM) process, the evaluation of terms and conditions and changes in exposure at risk are also significant issues to be analyzed.

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