Circumstances under which the internal model does not work effectively

When assessing and documenting circumstances under which the internal model does not work effectively, insurance and reinsurance undertakings shall take all of the following into account:

(a) the risks which are not covered by the internal model;

(b) the limitations in risk modelling used in the internal model;

(c) the nature, degree and sources of uncertainty connected with the results of the internal model including the sensitivity of the results for the key assumptions underlying the internal model;

(d) the deficiencies in data used in the internal model and the lack of data for the calculation of the internal model;

(e) the risks arising out of the use of external models and external data in the internal model;

(f) the limitations of information technology used in the internal model;

(g) the limitations of internal model governance.