Article 3
Supervisory authority's assessment of the choice of the parameters and the method to calculate the parameters
1. The supervisory authority shall assess the insurance or reinsurance undertaking's choice of:
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(a) |
the parameters to be replaced by considering whether the use of undertaking-specific parameters better reflects the underwriting risk profile of the undertaking; |
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(b) |
the segments for which parameters have been calculated by considering whether the use of undertaking-specific parameters better reflects the underwriting risk profile of the undertaking. |
2. The supervisory authorities shall assess the undertaking's justification for the choice of the standardised method to calculate undertaking-specific parameters. The supervisory authorities, when performing this assessment, shall consider whether the assumptions on standardised methods are satisfied and whether data are relevant to the undertaking's risk profile.