Several layers of hurdles, seem to be aimed at encouraging organisations to become increasingly self-monitoring (recording how they are testing themselves rather than just results):
Standard formula
Easiest to calculate but probably sets the highest bar
Undertaking Specific Parameters (USPs)
Organisation works out their own version of some of the numbers to replace assumptions in the standard formula. Requires more work and significant justification to back up the changed numbers. Likely to reduce the threshold.
Partial Internal Model
The organisation replaces parts of the model and records the justification of having done so.
Full Internal Model
The organisation replaces the whole model and records justification for having done so.
Split into 3 (or 4) 'pillars':
Pillar 1
Solvency requirement
Pillar 2
Risk Documentation
Pillar 3
Reporting
Pillar 4 (in some organisations, or may be included among the other three pillars)
Data Maintenance and Control
Abbreviations
ETL: Extract Transform Load
QRT: Quantitative Reporting Template
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