Insurance (prudential standards) determination No. 1 of 2005 - Prudential Standard GPS 222 - Business Continuity Management
Objective and key requirements of this PObjective and key requirements of this Prudential Standard
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Objective and key requirements of this Prudential Standard
This Prudential Standard aims to ensure that a general insurer (insurer) implements a whole of business approach to business continuity management (BCM) appropriate to the nature and scale of its operations. BCM increases an insurer’s resilience to business disruption arising from internal and external events and reduces the impact on the insurer’s business operations, reputation, profitability, policyholders and other stakeholders.
The prime responsibility for the business continuity of the insurer rests with the Board of Directors (the Board) of the insurer, or in the case of a foreign general insurer, the senior officer outside Australia with delegated authority from the Board.
The key requirements of this Prudential Standard are:
- the Board and senior management of the insurer must consider the insurer’s business continuity risks and controls as part of its overall risk management systems when completing the Board Declaration provided to APRA on an annual basis;
- an insurer must identify, on a whole of business basis, critical business functions, resources and infrastructure which, if disrupted, would have a material impact;
- an insurer must assess the impact of plausible disruption scenarios on all critical business functions, resources and infrastructure, and have in place appropriate recovery strategies to ensure that all necessary resources are readily available to withstand the impact of the disruption;
- an insurer must develop, implement and maintain a Business Continuity Plan (BCP) that documents procedures and information which enable the insurer to respond to disruptions and recover critical business functions. The BCP must be reviewed at least annually by responsible senior management and periodically reviewed through the insurer’s internal audit function or an external expert; and
- an insurer must notify APRA as soon as possible and no later than 24 hours after experiencing a major disruption that has the potential to materially impact policyholders.