OSFI reminds insurers about outsourcing guidelines

Given the proliferation of new technology-based outsourcing services such as cloud computing, the Office of the Superintendent of Financial Services (OSFI) is reminding federally regulated insurers that its expectations contained in Guideline B-10 continue to apply.

OSFI issued its revised Guideline B-10, Outsourcing of Business Activities, Functions and Processes, in March 2009. The guideline sets out OSFI’s expectations for federally regulated institutions that outsource or contemplate outsourcing, so they can design an appropriate outsourcing risk management program.

“In particular, FRFIs should consider their ability to meet the expectations contained in Guideline B-10 in respect of a material arrangement, with an emphasis on:

• Confidentiality, security and separation of property.
• Contingency planning.
• Location of records.
• Access and audit rights.
• Subcontracting.
• Monitoring the material outsourcing arrangements.”