(1) The Bank shall approve the partial internal model of an insurance undertaking or reinsurance undertaking only where it fulfils the requirements set out in Regulation 125 and the following additional conditions:

(a) the reason for the limited scope of application of the model is properly justified by the undertaking;

(b) the resulting Solvency Capital Requirement reflects more appropriately the risk profile of the undertaking and in particular complies with the principles set out in Regulations 113 to 115;

(c) its design is consistent with those principles so as to allow the partial internal model to be fully integrated into the Solvency Capital Requirement standard formula.

(2) The Bank, when assessing an application for the use of a partial internal model which covers only -

(a) certain sub-modules of a specific risk module,

(b) some of the business units of an undertaking with respect to a specific risk module, or

(c) parts of both,

may require the undertaking concerned to submit a realistic transitional plan to extend the scope of the model.