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Designing a Model for Testing the Effectiveness of a Regulation: The Case of DORA for Insurance Undertakings

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  • Simon Grima

    (Department of Insurance, Faculty of Economics Management and Accountancy, University of Malta, MSD 2080 Msida, Malta)

  • Pierpaolo Marano

    (Faculty of Business, Management and Economics, The University of Latvia, LV-1050 Riga, Latvia
    Department of Legal Studies, The Catholic University of the Sacred Heart, 20123 Milan, Italy)

Abstract

Technology is sometimes seen as a disruption that although provides opportunities for growth and development, also provides opportunities for deception, theft, and fraud. On the other hand, automation can make it easier to identify and protect from threats. Hence, a proposal was made by the European Commission to enact a digital operations resilience act. Therefore, our objective in this paper is to lay out the perceived characteristics of effective regulation by using DORA as our case study. We do this by carrying out a literature review and extracting using the thematic analysis approach propositions for these characteristics. Then, we test these using exploratory factor analysis and design a model for perceived effective regulation (PERM). We test the reliability and validity of this model by using the Cronbach alpha. Results show that according to our model, an effective regulation should have four characteristics, specifically “Flexibility and Integration”, “Proportionality and Cost”, “Reliability and Transparency”, and “Relevance and Timeliness”. Findings laid out in this paper and PERM can be used to test other proposed regulations to ensure that they are effective before being enacted and also to determine when there is a need for a revamp in specified areas of current regulations and requirements.

Suggested Citation

  • Simon Grima & Pierpaolo Marano, 2021. "Designing a Model for Testing the Effectiveness of a Regulation: The Case of DORA for Insurance Undertakings," Risks, MDPI, vol. 9(11), pages 1-12, November.
    • Handle: RePEc:gam:jrisks:v:9:y:2021:i:11:p:206-:d:677508
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    References listed on IDEAS

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    1. Mark Armstrong & David E.M. Sappington, 2006. "Regulation, Competition and Liberalization," Journal of Economic Literature, American Economic Association, vol. 44(2), pages 325-366, June.
    2. Kira R. Fabrizio & Nancy L. Rose & Catherine D. Wolfram, 2007. "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency," American Economic Review, American Economic Association, vol. 97(4), pages 1250-1277, September.
    3. David Moher & Alessandro Liberati & Jennifer Tetzlaff & Douglas G Altman & The PRISMA Group, 2009. "Preferred Reporting Items for Systematic Reviews and Meta-Analyses: The PRISMA Statement," PLOS Medicine, Public Library of Science, vol. 6(7), pages 1-6, July.
    4. Rex Deighton-Smith & Angelo Erbacci & Céline Kauffmann, 2016. "Promoting inclusive growth through better regulation: The role of regulatory impact assessment," OECD Regulatory Policy Working Papers 3, OECD Publishing.
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