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Recital 85

Recital 85

(85)Insurance and reinsurance undertakings should be free to decide the structure of the internal model that most appropriately reflects their risks. This should be done subject to approval by the supervisory authorities. In the case of partial internal models it might be more appropriate to calculate different components separately and integrate them directly into the standard formula without further aggregation in the internal model. In this case a probability distribution forecast should be calculated for each component.

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