Regulatory Alerts2017-04-27 | Circular 4/2017: Guidance notes on changes to the internal model by insurance undertakings under the supervision of the Federal Financial Supervisory AuthorityCircular 4/2017: Guidance Notes on Changes to the Internal Model by Insurance Undertakings under BaFin Supervision
Issued by the Federal Financial Supervisory Authority (BaFin), this circular mandates that insurance undertakings with approved internal models implement structured procedures for modifying their solvency capital calculations. The guidance distinguishes between model extensions, major changes requiring full prior approval and comprehensive documentation, and minor changes reported quarterly that accumulate to trigger major change thresholds. Undertakings must coordinate early with BaFin, maintain rigorous internal validation processes, and carefully time applications to prevent overlapping approvals while ensuring accurate solvency reporting.
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