(16)Where ratings are older than 12 months or where the review of the assignment has not been performed in due time according to the institution’s policy, the competent authorities should verify that conservative adjustments have been performed in terms of the risk-weighted assets calculation. The reasons for that are multiple. If the rating is outdated or based on outdated information the risk assessment might not be accurate. In particular, if the situation of the obligor has deteriorated during the last 12 months it is not reflected in the rating, and the risk is underestimated. In addition, according to the general rule relating to the estimation of the risk parameters, where the estimation of risk parameters is based on insufficient data or assumptions, a wider margin of conservatism should be adopted. The same rule should apply to the process of assignment of exposures to grades or pools, i.e. where insufficient information has been taken into account in the assignment process, additional conservatism should be adopted in the calculation of risk weights. The method of applying additional conservatism in the calculation of risk weights should not be specified as the institution may adjust either the rating, the risk parameter estimation or the risk weight directly. The adjustment should be proportional to the length of the period during which the rating or the information underlying the rating is out-of-date.