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Regulating and supervising the clouds: emerging prudential approaches for insurance companies

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FSI Papers  |  No 13  |  05 December 2018 by  Juan Carlos Crisanto, Conor Donaldson, Denise Garcia Ocampo and Jermy Prenio PDF full text (863kb)  |  38 pages The increasing use of cloud computing services for core functions brings undoubted benefits to the insurance sector. However, these services also pose unique risks, given the shared use of computing resources; the sensitivity of the data involved; the cross-border nature of service provision; and the concentration of market providers. This paper outlines the emerging regulatory and supervisory approaches that 14 authorities

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FSI Papers  |  No 13  | 
05 December 2018
PDF full text
 (863kb)
 |  38 pages

The increasing use of cloud computing services for core functions brings undoubted benefits to the insurance sector. However, these services also pose unique risks, given the shared use of computing resources; the sensitivity of the data involved; the cross-border nature of service provision; and the concentration of market providers. This paper outlines the emerging regulatory and supervisory approaches that 14 authorities have implemented to deal with these risks. Most of these authorities apply existing frameworks on outsourcing, governance, risk management and information security to insurers' cloud computing activities. In some cases, authorities have issued cloud-specific recommendations and guidance, with a special emphasis on information security, data confidentiality, recovery and resumption capabilities and audit rights. Insurers' cloud computing activities are generally included in the supervision of operational risks. In addition, authorities are making increasing use of thematic reviews and informal contacts with cloud providers.

JEL classification: G22, M15, O33

International Settlement
The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

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