APRA to enforce disaster planning
By Ross Kelly
GENERAL insurers and life insurance companies will be required to identify, assess and manage potential disruptions to the functioning of their business including bomb threats, computer system failures or loss of key staff under new standards to be enforced by the AustralianPrudential RegulationAuthority (APRA).
A draft prudential standard on business continuity management (BCM) was released last week by APRA which, when finalised, will force regulated institutions to prove annually that they could continue to meet their obligations to depositors and policy holders in the event of a disruption to business operations.
The BCM must outline procedures that will be followed in the event of a disruption including providing a communication plan for notifying relevant stakeholders and alternative operational sites.
Affected businesses will have to consider outsourcing arrangements by insisting that any third-party provider of services also has a BCM and will have to provide alternative outsourcing solutions if those already in place are adversely affected.
The draft requires affected businesses to conduct regular reviews of their BCM procedures including regular testing and maintenance of the continuity plan.
APRA has called for comments on the draft standard to be submitted by September 30, with the final prudential standard due to be released in November.
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