Regulatory Alerts2008-12-03 | OpR Expert Group recommendation on business environment and internal control system factors (of 05.03.2008)OpR Expert Group Recommendation on Business Environment and Internal Control System Factors
The OpR Expert Group recommends that financial institutions incorporate business environment and internal control system factors into their operational risk measurement systems under Section 291 of the Solvency Regulation. These factors must be selected as major risk drivers, with their sensitivity, relative weighting, and capital calculation integration clearly justified by experience, expert judgment, and empirical validation against internal loss data. Institutions must document the application of these factors, ensure independent review, prevent double-counting, and periodically reassess them to maintain adequate risk coverage and sensitivity.
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