(1) As part of its risk management system an insurance undertaking or reinsurance undertaking shall conduct its own risk and solvency assessment.

(2) The assessment shall include at least the following:

(a) the overall solvency needs taking into account the specific risk profile, approved risk tolerance limits and the business strategy of the undertaking;

(b) the compliance, on a continuous basis, with the capital requirements, as laid down in Regulations 113 to 140, and with the requirements regarding technical provisions, as laid down in Regulations 83 to 101;

(c) the significance with which the risk profile of the undertaking deviates from the assumptions underlying the Solvency Capital Requirement as laid down in Regulation 114(3) to (5), calculated with the standard formula in accordance with Regulations 116 to 124 or with its partial or full internal model in accordance with Regulations 125 to 138.

(3) For the purposes of paragraph (2)(a), the undertaking shall have in place processes which are proportionate to the nature, scale and complexity of the risks inherent in its business and which enable it to properly identify and assess the risks it faces in the short and long term and to which it is or could be exposed.