How to assess standard formula appropriateness

The areas where firms must work hardest to show suitability


The Preparatory Guidelines for the Forward Looking Assessment of Own Risks (Flaor) – the pre-cursor to the Own Risk and Solvency Assessment (Orsa) – require companies to assess during 2015 whether their risk profile deviates from the assumptions underlying the Solvency II solvency capital requirement (SCR) calculation, and whether these deviations are significant.

This requirement applies to both standard formula and internal model companies. However, the internal model requirements of Solvency