FSCA Communication 1 of 2024 (INS): Draft Joint Standard on Outsourcing by Insurers

FSCA COMMUNICATION 1 OF 2024 (INS) Submission to Parliament of draft Joint Standard – Outsourcing by Insurers

1. The purpose of this Communication is to inform stakeholders that on 8 December 2023, the following draft Joint Standard and supporting documents were submitted to Parliament in terms of section 103(1) of the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) (FSR Act): 1.1 Joint Standard – Outsourcing by Insurers (Joint Standard); 1.2 Statement supporting the Joint Standard; and 1.3 Consultation Report on the Joint Standard.
2. The Joint Standard sets out the out the principles for outsourcing that insurers must comply with and at a high-level includes the following requirements – 1.1 outsourcing of material functions; 1.2 concept of “materiality” in the business of the insurer; 1.3 outsourcing arrangements that require prior regulatory notification; 1.4 due diligence and legal provisions that must be included in any outsourcing contract; 1.5 the management and review of outsourcing arrangements; and 1.6 a board-approved policy and related procedures for assessing the risks involved with outsourcing. The documents referred to in paragraph 1 are available on the FSCA’s website at www.fsca.co.za.
3. For more information regarding the draft Joint Standard and/or this Communication, please contact the Regulatory Frameworks Department of the Authority by emailing andile.mjadu@fsca.co.za. KATHERINE GIBSON DEPUTY COMMISSIONER FINANCIAL SECTOR CONDUCT AUTHORITY Date of publication: 7 February 2024