ERM Glossary Organization

International ERM Glossary

The International ERM Glossary is intended to provide users with a set of definitions that are in common usage around the world by actuaries, regulators and members of the insurance industry. The purpose in developing the glossary is to help provide a common understanding of the terms currently in use, as definitions and meanings have varied over time, and among practitioners. It can also be used as a training and educational tool for regulators.

The glossary can be consulted per letter, organization or grouping.

DISCLAIMER: The content of the International ERM Glossary has been compiled by the Joint ORSA Subcommittee of the Insurance Regulation Committee and the Enterprise and Financial Risk Committee of the IAA. This information has been collated and presented for educational and informational purposes to the members of the IAA and interested parties. The IAA assumes no responsibility for the accuracy, completeness, currency, reliability of the information in the International ERM Glossary or access to any information contained on any of the sources cited in the Glossary. The IAA, its employees and officers shall not be liable for any loss or damage, direct or indirect, which may arise or occur as a result of the use of or reliance upon any of the material in the International ERM Glossary.

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Glossary
A C D E F G I L M O P R S T U V

Term	Grouping	Organization or Jurisdiction Defining Term	Source of Definition	Definition	Hidden
Available Capital	Solvency terms	China	CIRC C-ROSS Conceptual Framework	The economic resources that can absorb losses in insurance undertakings on a going-concern basis or upon liquidation. Available capital is equal to admitted assets minus admitted liabilities of insurance undertakings.	A
Credit Risk (Counterparty Risk)	Risk Categories	China	CIRC C-ROSS Conceptual Framework	The risk of losses arising from counterparties failing to fulfill contractual obligations, or to fulfill the contractual obligations on time, or from adverse changes in credit conditions.	C
Insurance Risk (see Underwriting Risk)	Risk Categories	China	CIRC C-ROSS Conceptual Framework	The risk of losses caused by adverse deviation from expected experience of mortality, morbidity, loss ratio, lapse, etc.	I
Liquidity Risk	Risk Categories	China	CIRC C-ROSS Conceptual Framework	The risk that an insurance undertaking is unable to obtain sufficient funds in a timely manner, or is unable to obtain sufficient fund at a reasonable cost in a timely manner, in order to meet the liabilities when they fall due.	L
Market Risk	Risk Categories	China	CIRC C-ROSS Conceptual Framework	The risk of unexpected losses arising from adverse changes in interest rates, FX, equity, commodity, etc.	M
Minimum Capital Requirement	Solvency terms	China	CIRC C-ROSS Conceptual Framework	The amount of capital required according to the regulations to cover the adverse impact on the undertaking's solvency capability arising from market risk, credit risk, insurance risk, etc.	M
Operational Risk	Risk Categories	China	CIRC C-ROSS Conceptual Framework	The risk of direct or indirect losses due to inadequate internal processes, personnel and systems or from external events, including legal and supervisory compliance risk (but excluding strategic risk and reputational risk).	O
Reputational Risk	Risk Categories	China	CIRC C-ROSS Conceptual Framework	The risk of losses due to negative evaluation of insurance undertakings by relevant stakeholders resulting from the insurance undertakings operation or external events.	R
Strategic Risk	Risk Categories	China	CIRC C-ROSS Conceptual Framework	The risk arising from incompatibility between strategy and the market environment or the company's capacity, due to ineffective strategy formulation and execution processes or the changing business environment.	S