There are several references to scenario testing in the course and examiner's reports. How does it work in practice? For instance in Q1 (v) in last April 2008 Q1 (v) it suggested using scenario testing to set a range for reserves.
Just like it says on the tin, really. Pick a scenario, bung it in your model, see what comes out the other end, and this gives you an idea for what could possibly happen/change. Lloyd's Realistic Disaster Scenarios are a classic example of their usage.
