Regulatory Alerts2025-12-22
GFSC Guidance Note Solvency 2: Internal Models, Assessment, Model Change and the Role of NEDs
The Gibraltar Financial Services Commission issued this guidance to set expectations for insurance undertakings regarding internal model applications, validation, and governance under Solvency 2. The document mandates that Non-Executive Directors actively challenge executive management on model assumptions and limitations while requiring firms to maintain robust change policies and contingency plans for approval scenarios. Additionally, it clarifies that the regulator uses quantitative analysis as a risk-based indicator to assess calibration standards rather than as a mechanistic pass/fail criterion for model approval.
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