The latest Solvency II Internal Model Approval Process update will be of interest to any firms preparing to use an internal model under the Solvency II regime.

The Financial Services Authority has published the latest of its Solvency II IMAP updates. The update provides an overview of the “pre-application” phase of the Internal Model Approval Process (IMAP).

The pre-application process will start once a firm has submitted its Pre-Application Qualifying Criteria Assessment (PAQC) template to the FSA and the firm has received notice from the regulator that it meets the required criteria. The end of pre-application takes place when a firm submits a formal application to use an internal model. The FSA anticipates that firms wishing to use their model on day one of the new regime will need to submit their application between November 2011 and April 2012.

The pre-application phase consists of:

  • scoping and planning discussions between the FSA and the firm;
  • discussions between firms and the FSA concerning Solvency II requirements and the content of the firm’s application;
  • completion by the firm of a self-assessment against Solvency II requirements;
  • meetings between the firm and the FSA to agree a work plan;
  • monthly reporting by the firm to the FSA on progress against their project plan;
  • regular face-to-face meetings between the firm and the FSA to review progress; and
  • a review and assessment of the internal model related aspects of the firm's systems and controls.

To view the latest IMAP update: IMAP update April 2010