Explanation:
Under Solvency II, insurers calculating their Solvency Capital Requirement (SCR) using an internal model must ensure the model meets several standards. These include the Use test, Statistical quality standards, Calibration standards, Profit and Loss attribution, Validation standards, and Documentation standards. The 'Validity test' is not one of the designated tests under the Solvency II internal model requirements.
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Q.17 Pillar 1 of solvency II specifies a minimum capital requirement (MCR), and a solvency capital requirement (SCR). Under the internal models approach of calculating SCR, the internal model used must satisfy several tests, EXCEPT:
A
Use test
B
Calibration test
C
Validity test
D
Statistical quality test