ERM-118-14: Model Validation Principles Applied to Risk and Capital Models in the Insurance Industry

📗erm-118-14
📖erm-learning-obj-2

#1

Reading Source:
http://www.crocouncil.org/images/CRO_Council_-_Model_Validation_Principles.pdf

Topics Covered in this Reading:

  • Executive Summary
  • Introduction
  • Core Validation Principles
    • Model design and build need to be consistent with the model’s intended purpose
    • Ensure that model validation is an independent process
    • Establish an owner of model validation
    • Ensure appropriateness of established model governance
    • Make model validation efforts proportional to evidenced areas of materiality and complexity
    • Validate the model components
    • Address Limitations of Model Validation
    • Document the Model Validation
  • Conclusion