As is the case in many other sectors, outsourcing is frequently used by insurers across various aspects of their operations, from business processes (such as delegated underwriting and claims handling) through to the systems that underpin those functions. Where insurers enter into outsourcing arrangements, in addition to the general considerations that should be given to any outsourcing arrangement, they are subject to a range of specific financial services regulatory obligations.
We have recently published a practice note on “Outsourcing in the Insurance Industry” with the Practical Law Company. The guide considers the outsourcing-related obligations for insurers under the current PRA and FCA regimes, as well as the expected future requirements under the Solvency II Directive (2009/138/EC) once it has been implemented in the UK. This includes the guidelines recently issued by EIOPA and which took effect at the beginning of this year.