Public consultation on the draft Application Paper on Operational Resilience Objectives [and Toolkit]
The consultation closed on 11 October 2024. The IAIS is in the process of reviewing the comments received.
Background information
Operational Resilience is a key strategic theme for the IAIS and is a topic that has relevance across regions and jurisdictions, with many authorities and insurers facing the same or similar challenges. The IAIS’ work in this area is ongoing. In 2016 and 2018 respectively, the IAIS published an Issues Paper and Application Paper examining fundamental aspects of cyber security for financial institutions. In 2023, the IAIS published an Issues Paper that identified issues impacting on operational resilience in the insurance sector with respect to cyber resilience, IT third-party outsourcing and business continuity management, and provided examples of how insurance supervisors are approaching these issues.
The IAIS has now developed Operational Resilience Objectives for the insurance sector, with the aim of providing a sound and consistent foundation to support supervisory authorities in developing and strengthening their approaches to supervising insurers’ operational resilience. These Objectives are outcomes-based, do not set out new requirements, and rather provide clarity on the application of existing supervisory materials. These Objectives have been developed in the context of the insurance sector being a complex, interconnected, cross border system in which insurers are continuing to embrace digital innovation, rely on third-party services to support their critical operations, and are increasingly subject to operational risks that may be systemic in nature. Accordingly, the Objectives address:
- the relationship amongst operational resilience, governance and operational risk management
- key elements of a sound approach to operational resilience that encourage the effective and holistic management of insurers’ people and processes
- Objectives for insurance supervisors.
The Objectives represent the first phase of a two-part consultation. The second phase, to develop a draft Toolkit is underway and will set out supervisory practices relevant to the Objectives. Following public consultation on the draft Toolkit in the first half of 2025, the two phases of this work will be integrated into a single Application Paper.
A public background session was held via webinar on 10 September 2024 from 14:00-15:00 CEST. The recording of the session can be found here.