1.Insurance and reinsurance undertakings shall document the following processes:
the collection of data and analysis of its quality and other information that relates to the calculation of technical provisions;
the choice of assumptions used in the calculation of technical provisions, in particular the choice of relevant assumptions about the allocation of expenses;
the selection and application of actuarial and statistical methods for the calculation of technical provisions;
the validation of technical provisions.
2.For the purposes of point (a) of paragraph 1, the documentation shall include:
a directory of the data used in the calculation of the technical provisions, specifying their source, characteristics and usage;
the specification for the collection, processing and application of data referred to in Article 19(3)(e);
where data are not used consistently over time in the calculation of technical provisions, a description of the inconsistent use and its justification.
3.For the purposes of point (b) of paragraph 1, the documentation shall include:
a directory of all the relevant assumptions that the calculation of technical provisions are based upon; this shall include assumptions on future management actions;
a justification for the choice of the assumption in accordance with Subsection 1 of Section 3 of Chapter III;
a description of the inputs on which the choice is based;
the objectives of the choice and the criteria used for determining the appropriateness of this choice;
any material limitations in the choice made;
a description of the processes in place to review the choice of assumptions;
a justification for the changes of assumptions from one period to another and an estimation of the impact of material changes;
the relevant deviations referred to in Article 23(2).