Originally published in the Norton Rose Insurance Updater, February 2010.
The Financial Services Authority (FSA) has published an update
for firms on the internal model approval process (IMAP) for
Solvency II. The update has been sent out in order to provide
information on key developments as the FSA prepares to begin the
'pre-application' process for model approval.
Solvency II will allow firms to apply an internal model for the
calculation of their Solvency Capital Requirement (SCR) as long as
supervisory approval is given.
The FSA is currently preparing to carry out 'firm-facing'
IMAP activity from April this year and expects to be working with
firms on the pre-application process during the second and third
quarters of 2010.
The IMAP update provides: information on the pre-application
qualification criteria; a report on the progress of a series of
pilot exercises undertaken to test the FSA's planned approach
to pre-application; an update on the FSA's thematic review of
key aspects of the use of internal models; and, an overview of
CEIOPS advice to the European Commission on internal model
approval.
The FSA has also published on its website a pre-application
qualifying criteria template and thematic questionnaire which
considers risk management, the use test, data management and
validation including valuation of assets and liabilities.
For further information: FSA publishes Solvency II IMAP
update
(http://www.fsa.gov.uk/pubs/international/imap_update.pdf)
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