On 24 April 2018, the Dutch Central Bank (De Nederlandsche Bank, DNB) published a news item announcing that it has launched a consultation on good practices for controlling outsourcing risks.
According to DNB, insurers outsource various activities for various reasons (for example, to make use of the knowledge and scale of a service provider or to reduce costs). This could result in risks for an insurer, such as the risk that the continuity and reliability of the insurer’s operations might be jeopardized in case of a breach of contract by the service provider, or if the service provider has financial problems or misuses confidential data.
Research by DNB has shown that insurers do not always adequately manage such outsourcing risks and therefore the good practices that are being consulted on are intended to rectify this. The main question that has been raised by DNB is whether the good practices are sufficiently clear and helpful in meeting the legal requirements around outsourcing.
DNB invites insurers, advisors and other service providers to provide input on the consultation. The consultation period ends on 31 May 2018.
View the draft good practices (Dutch only), 24 April 2018.