Notice on Technology Risk Management for Registered Insurance Brokers

MAS Notice No.: FSM-N19
Notice to registered insurance brokers
Financial Services and Markets Act 2022
Issue Date: 09 May 2024
NOTICE ON TECHNOLOGY RISK MANAGEMENT
Introduction
1 This Notice is issued pursuant to section 29(1) of the Financial Services and Markets Act 2022 (the “Act”) and applies to all registered insurance brokers. Definitions 2 For the purpose of this Notice— “critical system” in relation to a registered insurance broker, means a system, the failure of which will cause significant disruption to the operations of the registered insurance broker or materially impact the registered insurance broker’s service to its customers, such as a system which— (a) processes transactions that are time critical; or (b) provides essential services to customers; “IT security incident” means an event that involves a security breach, such as hacking of, intrusion into, or denial of service attack on, a critical system, or a system which compromises the security, integrity or confidentiality of customer information; “registered insurance broker” has the meaning given by section 2 of the Insurance Act 1966; “relevant incident” means a system malfunction or IT security incident, which has a severe and widespread impact on the registered insurance broker’s operations or materially impacts the registered insurance broker’s service to its customers;

“system” means any hardware, software, network, or other information technology (“IT”) component which is part of an IT infrastructure; “system malfunction” means a failure of any of the registered insurance broker’s critical systems. 3 Except where defined in this Notice or if the context otherwise requires, the expressions used in this Notice have the same meanings as in the Act. Technology Risk Management 4 A registered insurance broker must put in place a framework and process to identify critical systems. 5 A registered insurance broker must make all reasonable effort to maintain high availability for critical systems. The registered insurance broker must ensure that the maximum unscheduled downtime for each critical system that affects the registered insurance broker’s operations or service to its customers does not exceed a total of 4 hours within any period of 12 months. 6 A registered insurance broker must establish a recovery time objective (“RTO”) of not more than 4 hours for each critical system. The RTO is the duration of time, from the point of disruption, within which a system must be restored. The registered insurance broker must validate and document at least once every 12 months, how it performs its system recovery testing and when the RTO is validated during the system recovery testing. 7 A registered insurance broker must notify the Authority as soon as possible, but not later than 1 hour, upon the discovery of a relevant incident. 8 A registered insurance broker must submit a root cause and impact analysis report to the Authority, within 14 days or such longer period as the Authority may allow, from the discovery of the relevant incident. The report must contain— (a) an executive summary of the relevant incident; (b) an analysis of the root cause which triggered the relevant incident; (c) a description of the impact of the relevant incident on the registered insurance broker’s—

i. compliance with laws and regulations applicable to the registered insurance
broker;
ii. operations; and
iii. service to its customers; and
(d) a description of the remedial measures taken to address the root cause and consequences of the relevant incident. 9 A registered insurance broker must implement IT controls to protect customer information from unauthorised access or disclosure. Effective Date 10 This Notice shall take effect on 10 May 2024.