Appropriateness of standard formula for SCR

As part of the Solvency II, firms are required to understand and explain the differences between their own risk profile and the underlying assumptions of their SCR, to demonstrate appropriateness. However, it is one aspect of Solvency II preparation that may have sat on the backburner until now.

Given the approaching Solvency II deadline, it is now time for firms to consider the practicalities of carrying out this exercise. We have drafted a briefing note to help firms with this process, which:

• Considers the requirements for standard formula firms;
• Outlines resources that may be of use; and

Offers some guidance on carrying out this exercise.