Solvency II: op risk standard approach capital too high under QIS5, says UK insurer

Carlos Montalvo, Ceiops

Proposed capital charges for the standard approach to operational risk are calibrated at too high a level compared with those for insurers using internal models, under the fifth quantitative impact study (QIS5) for the Solvency II directive, according to a risk manager at one UK insurance firm.

"The standard formula comes out higher than the internal model capital," says Kevin Barrett, interim head of risk at life and incapacity insurer Unum UK. "Logically that is correct, but if we look at the

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