Information and assumptions used for the calculation of the probability distribution forecast

1. Information shall only be considered credible for the purposes of Article 121(2) of Directive 2009/138/EC where insurance and reinsurance undertakings provide evidence of the consistency and objectivity of that information, the reliability of the source of information and the transparency of the method by which that information is generated and processed.

2. Assumptions shall only be considered realistic for the purposes of Article 121(2) of Directive 2009/138/EC where they meet all of the following conditions:

(a) insurance and reinsurance undertakings are able to explain and justify each of the assumptions, taking into account the significance of the assumption, the uncertainty involved in the assumption and why the relevant alternative assumptions are not used;

(b) the circumstances under which the assumptions would be considered false can be clearly identified;

(c) insurance and reinsurance undertakings establish and maintain a written explanation of the methodology used to set those assumptions.