Document ID: chunk:federal_register_of_legislation:F2016L01436:body:0:p2
Version: federal_register_of_legislation:F2016L01436
Segment Type: other
Provision Reference: 
Character Range: 2808–5979

Act 1995.

    general insurer has the meaning given in section 11 of the Insurance Act 1973.

    life company has the meaning given in the Schedule to the Life Insurance Act 1995.

registered life NOHC has the meaning given to the expression registered NOHC in the Schedule to the Life Insurance Act 1995.

Schedule

Prudential Standard CPS 231 Outsourcing comprises the 12 pages commencing on the following page.

Prudential Standard CPS 231

Outsourcing
Objectives and key requirements of this Prudential Standard
This Prudential Standard requires that all outsourcing arrangements involving material business activities entered into by an APRA-regulated institution and a Head of a group be subject to appropriate due diligence, approval and ongoing monitoring. All risks arising from outsourcing material business activities must be appropriately managed to ensure that the APRA-regulated institution, or the group it heads, is able to meet its financial and service obligations to its depositors and/or policyholders.
The Board of an APRA-regulated institution and the Board of a Head of a group, respectively, have ultimate responsibility for the outsourcing policy of the institution or group.
The key requirements of this Prudential Standard are that an APRA-regulated institution and a Head of a group must:
     * maintain a policy, approved by the Board, relating to outsourcing of material business activities;
     * have sufficient monitoring processes in place to manage the outsourcing of material business activities;
     * for all outsourcing of material business activities with third parties, have a legally binding agreement in place, unless otherwise agreed by APRA;
     * consult with APRA prior to entering into agreements to outsource material business activities to service providers that conduct their activities outside Australia; and
     * notify APRA after entering into agreements to outsource material business activities.
Where an APRA-regulated institution is the Head of a group, this Prudential Standard requires that any outsourcing arrangements involving material business activities entered into by members of the group must be subject to appropriate due diligence, approval and ongoing monitoring, and the provisions of this Prudential Standard are applied appropriately throughout the group, including in relation to institutions that are not APRA-regulated. In addition, where specified, the Head of a group must comply with the requirements on a group basis.

Authority
     1. This Prudential Standard is made under:
(a)          section 11AF of the Banking Act 1959 (Banking Act);
(b)          section 32 of the Insurance Act 1973 (Insurance Act); and
(c)          section 230A of the Life Insurance Act 1995 (Life Insurance Act).

Application
2.             This Prudential Standard applies to all 'APRA-regulated institutions',[1] defined as:
(a)          all authorised deposit-taking institutions (ADIs), including foreign ADIs, and non-operating holding companies authorised under the Banking Act (authorised banking NOHCs);
(b)          all general insurers, including Category C insurers, non-operating