On Sep. 9, RSA FSCA issued draft standard on insurer outsourcing.
RSA FSCA and RSA CB consulted on draft standard regulating outsourcing by insurers.
Overview
The objective of draft joint standard is to set out minimum requirements when insurers outsource material business functions and activities to third-party service providers.
To ensure outsourcing does not impair prudent management of an insurer's business.
If not properly managed, outsourcing material business functions can have adverse effects on an insurer's strategic objectives, leading to poor policyholder outcomes.
Joint standard to be made under s.107, read with s. 105, 106 and 108 of Financial Sector Regulation Act 2017; intended to apply to all insurers, including microinsurers, licensed under Insurance Act, other than Lloyd’s and branches of foreign reinsurers.
Effectiveness
Written submissions must be made by Oct. 26, 2021.
Sep. 13, 2021, Update
On Sep. 13, 2021, RSA CB issued joint communication, updated draft standard page.
Feb. 2024 Submission to Parliament
On Feb. 7, 2024, RSA FSCA issued communication to inform stakeholders that draft joint standard: outsourcing by insurers, was submitted to parliament on Dec. 8, 2023.
Draft joint standard submitted with supporting documents including: statement supporting the joint standard, and consultation report on the joint standard.
May 2024 Joint Standard Issued
On May 17, 2024, RSA FSCA and RSA CB issued joint communication on publication of joint standard 1/2024 on outsourcing by insurers, alongside supporting documents.
Publication of joint standard marks conclusion of process for making regulatory instruments as prescribed in chapter 7, Financial Sector Regulation Act (FSR Act).
Repeals Prudential Standard GOI 5: Outsourcing by Insurers, and also amends regulatory instruments, as referred to in attachment 2 to the joint standard.
Joint standard on outsourcing by insurers comes into operation on Dec. 1, 2024.
Regulators
RSA CB; RSA FSCA
Entity Types
Ins
Reference
Com 1/2024, RN 1/2024, 5/17/2024; Com 1/2024(INS), 2/7/2024; PR 9/13/2021; CP, Cir 5/2021, 9/9/2021
