Featured Product

    EIOPA Consults on Guidelines on Outsourcing to Cloud Service Providers

    July 01, 2019

    EIOPA launched a consultation on the guidelines for outsourcing to cloud service providers. The guidelines are addressed to insurance and reinsurance undertakings as well as national supervisory authorities in EU. The guidelines specify how the outsourcing provisions set forth in the Solvency II Directive (2009/138/EC), in the Delegated Regulation 2015/35, and in the EIOPA guidelines on system of governance need to be applied in case of outsourcing to cloud service providers. The consultation is open until September 30, 2019. These guidelines apply from July 01, 2020 to all cloud outsourcing arrangements entered into, or amended on or after this date.

    EIOPA developed these guidelines in line with its contribution to Fintech Action Plan of EC and taking into account the outcome of its Fourth Insurtech Roundtable on the use of cloud computing by (re)insurance undertakings. The guidelines aim to provide clarification and transparency to market participants and to help avoid potential regulatory arbitrages. They also intend to foster supervisory convergence regarding the expectations and processes applicable in relation to cloud outsourcing. Annex 1 to the consultation contains the impact assessment to the guidelines whereas Annex II provides an overview of questions for consultation. The key areas covered in the guidelines include the following:

    • Criteria to distinguish whether cloud services should be considered within the scope of outsourcing
    • Principles and elements of governance of cloud outsourcing, including documentation requirements and list of information part of the notification to supervisory authorities
    • Pre-outsourcing analysis, including materiality assessment, risk assessment, and due diligence on the service providers
    • Contractual requirements
    • Management of access and audit rights; security of data and systems; sub-outsourcing, monitoring, and oversight of cloud outsourcing; and exit strategies
    • Principle-based instructions for national supervisory authorities on the supervision of cloud outsourcing arrangements including, where applicable, at group level

    The use of cloud outsourcing is a common practice among all types of financial undertakings, not only for insurance and reinsurance undertakings. Moreover, the key associated risks are similar across sectors. Acknowledging these facts and recognizing the potential risks of regulatory fragmentation in developing these guidelines—in addition to the (re)insurance provisions on outsourcing—EIOPA also considered the most recent guidance published by EBA.

     

    Related Links

    Comment Due Date: September 30, 2019

    Effective Date: July 01, 2020

    Keywords: Europe, EU, Insurance, Reinsurance, Guidelines, Outsourcing, Cloud Service Providers, Governance, Fintech, Insurtech, Regulatory Arbitrage, Supervisory Convergence, Cloud Outsourcing, Solvency II, EBA, EC, EIOPA

    Featured Experts
    Related Articles
    News

    APRA Announces Deferral of Capital Reform Implementation

    APRA announced that it is deferring the scheduled implementation of Basel III reforms in Australia by one year.

    March 30, 2020 WebPage Regulatory News
    News

    IFRS Publishes Statement on Its Work During the COVID-19 Crisis

    IFRS, in its statement, emphasized that it shares global concerns about the impact of COVID–19 and is supporting its stakeholders by reconsidering timelines of its meetings and publications, providing information on the application of IFRS 9 on financial instruments, and offering calendar updates on ongoing activities.

    March 27, 2020 WebPage Regulatory News
    News

    US Agencies Announce Changes to SA-CCR and CECL Rules Due to COVID-19

    In light of the recent disruptions in economic conditions due to the COVID-19 outbreak, US Agencies (FDIC, FED, and OCC) announced two actions to allow banking organizations to continue lending to households and businesses.

    March 27, 2020 WebPage Regulatory News
    News

    IAIS Adjusts Work Program to Address Impact of COVID-19 on Insurers

    Considering the impact of COVID-19 outbreak, IAIS announced initial adjustments to its work program to provide operational relief to its member supervisors, insurers, and other stakeholders.

    March 27, 2020 WebPage Regulatory News
    News

    OSFI Announces Regulatory Adjustments to Support COVID-19 Efforts

    OSFI published three targeted industry letters that announce a series of regulatory adjustments to support the financial and operational resilience of federally regulated banks, insurers, and private pension plans in the light of COVID-19.

    March 27, 2020 WebPage Regulatory News
    News

    UK Regulators Announce Measures to Address Impact of COVID-19

    UK Regulatory Authorities published statements and guidance addressed to financial entities on dealing with the impact of the coronavirus (COVID-19) outbreak.

    March 26, 2020 WebPage Regulatory News
    News

    ISDA and Industry Request Delay in Timeline for Initial Margin Rules

    Considering the challenges posed by the COVID-19 pandemic, ISDA submitted a letter on behalf of 21 industry associations and their members requesting BCBS, IOSCO, and global regulators to suspend the current timeline for the initial margin phase-in.

    March 26, 2020 WebPage Regulatory News
    News

    FCA, FRC, and PRA Issue Joint Statement to Address Impact of COVID-19

    In response to the COVID-19 outbreak, FCA, the Financial Reporting Council (FRC), and PRA have announced a series of actions and made statements to support the continued functioning of capital markets in the UK.

    March 26, 2020 WebPage Regulatory News
    News

    EC Rule Corrects Regulation Supplementing Solvency II Directive

    EC published the EU Delegated Regulation 2020/442, which corrects the EU Delegated Regulation 2015/35 that supplements Solvency II Directive (2009/138/EC).

    March 26, 2020 WebPage Regulatory News
    News

    FED and FFIEC Offer Reporting Relief to Institutions Due to COVID-19

    FED and FFIEC announced regulatory reporting relief to financial institutions due to disruptions caused by the COVID-19.

    March 26, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4900