Internal model approval – the regulator’s view

The perfect model

Solvency II allows insurers for the first time to use internal models to calculate their solvency capital. For those companies that chose this route, developing such a model is usually a large and complicated task. It is also a challenge for the regulators themselves who have to scrutinise the models and approve them.

The new directive will apply across the European Union, covering a range of companies that vary widely in their size, complexity and the sophistication of their risk management and