Principles for Doing Business at Lloyd's
Principle 6: Reserving – Principles for Doing Business at Lloyd's

Principles for Doing Business at Lloyd's P6.6: 6.6 Best estimate reserves under Solvency II with any UK GAAP margin explicit

Best estimate reserves are set in line with Solvency II, with any UK GAAP margin set explicitly on top. Baseline: held estimates no lower than the SAO provider's estimate for each open year of account; high-level approaches to explicit margin with some link to downside; reasonable allocation of margin to class and year of account; margin monitored against the margin policy with pre-emptive action. Higher levels add a defined margin policy assessed with qualitative and quantitative methods, stress and scenario tests and a margin policy linked to risk appetite.

Maintained by Gerard Blokdyk

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