Regulatory Alerts2025-12-22
GFSC Guidance Note on Solvency 2 Technical Provisions and Internal Models for General Insurers
The Gibraltar Financial Services Commission issued this guidance to establish expectations for general insurers regarding the calculation of technical provisions and the use of internal models under Solvency 2. The document mandates that firms address events not in data, avoid optimistic assumptions, and ensure internal models accurately reflect specific risk profiles rather than relying on defaults or generic industry standards. It further requires consistency between technical provision methods and internal model forecasts, including proper handling of parameter uncertainty, reinsurance exhaustion, and third-party model validation.
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