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7-16-2024
In this insightful webinar, industry experts Tetiana George and Yvonne Lam come together to demystify the complexities surrounding the new Australian Prudential Regulation Authority (APRA) Prudential Standard CPS 230.
Tetiana George, the CEO and founder of Curium, brings 17 years of extensive experience in the insurance domain and a wealth of international knowledge, having worked in over 25 countries. She is renowned for her expertise in compliance, claims management, and operational efficiency within the insurance and technology sectors. Under her leadership, Curium leverages advanced technology to simplify compliance processes, streamline operations, and significantly reduce instances of non-compliance within organisations, empowering professionals in the insurance industry with invaluable insights and tools to excel in a rapidly evolving regulatory environment.
Joining her is Yvonne Lam, a Principal at Gilchrist Connell, an established Australian law firm specialising in the insurance sector. Yvonne leads the firm’s Corporate Insurance and Insurtech team, advising on legal compliance and regulatory matters throughout all stages of the insurance business lifecycle. With years of experience assisting insurers, underwriting agencies, brokers, and technology providers, she has cultivated a deep and comprehensive understanding of the operational challenges faced by the industry amid the intensifying regulatory landscape. Yvonne’s comprehensive legal knowledge and hands-on approach make her a pivotal figure in helping stakeholders navigate the complexities of compliance and risk management.
The primary aim of this webinar is to unpack the implications of CPS 230 and provide actionable guidance on how insurance professionals can prepare for this significant regulatory shift. As CPS 230 ushers in stringent requirements for operational resilience, understanding its core tenets is essential for businesses operating in the insurance sector. This session will discuss what constitutes critical operations, the role of material service providers, and how organisations can effectively identify and manage risks associated with these operational functions. By the end of the webinar, attendees will have a clear understanding of how CPS 230 affects their businesses, the required preparations for compliance, and strategic recommendations for mitigating risks and enhancing operational efficacy in anticipation of this groundbreaking regulatory change.
Join Tetiana and Yvonne for a thorough exploration of CPS 230’s impact. They will equip you with practical steps to thrive in this new landscape.
CPS 230 is a new prudential standard introduced by APRA to enhance operational resilience among regulated entities.
CPS 230 stands for the new APRA Prudential Standard, which aims to ensure that insurance companies and related entities are prepared for operational risks. Operational risks can come from various sources, including technology failures, data breaches, and major disruptions like natural disasters or pandemics. With recent global events highlighting vulnerabilities within the insurance sector, APRA felt it necessary to establish this standard to improve how organisations manage their essential operations, and the risks associated with service providers.
The implications of CPS 230 extend beyond licensed insurers to indirect stakeholders like underwriting agencies and suppliers.
Although CPS 230 directly regulates APRA-licensed entities, it has a broader impact on a wide range of industry professionals, including those who interact with insurance processes. This means that even if APRA does not directly regulate your organisation if you engage with critical operations of an insurer—such as claims processing or underwriting—you may still be subject to rigorous compliance requirements driven by insurers. If your actions could affect an insurer’s operational resilience, you are part of the regulatory framework.
Insurers must identify critical operations and material service providers to comply with CPS 230.
Critical operations are defined as essential processes whose disruption could materially affect policyholders or the insurer’s role in the financial system. Furthermore, insurers must identify which of their external partners—material service providers—are necessary for conducting these critical operations. This identification must occur earlier than the CPS 230 implementation date, signalling a preparatory phase for insurers and their partners to ensure they can effectively manage operational risks.
Compliance with CPS 230 requires proactive steps and has a set timeline leading up to the formal enforcement date.
The transition to CPS 230 is not immediate; the standard is set to take effect on July 1, 2025, with preparatory phases starting much earlier. Insurers are expected to take proactive steps, including identifying their critical operations by mid-2024. This timeline allows industry participants—particularly those in supporting roles—to prepare by adjusting internal processes and contract terms to align with the new regulatory expectations, thus avoiding last-minute scrambling.
Practical Recommendations for Stakeholders
Stakeholders should actively engage in compliance and prepare for the evolving requirements of CPS 230.
As the insurance landscape shifts with CPS 230, stakeholders should not wait until the regulation takes full effect to act. Organisations are encouraged to assess their current compliance frameworks, build robust business continuity plans, engage with their insurer partners regarding expectations, and enhance their operational processes. Proactive engagement will help mitigate potential risks and ensure readiness, allowing firms to negotiate better terms amid increasing compliance requirements.
Effective data management and clear communication are essential for compliance with CPS 230.
Meeting the regulatory expectations of CPS 230 relies on accurate data and seamless communication among service providers and insurers. Organisations must maintain high-quality records of their operational processes and compliance efforts, ensuring transparency when audits or inquiries arise. Establishing an effective communication strategy within and outside the firm will support compliance and enhance overall operational efficiency.
Curium would like to acknowledge the Traditional Owners of the land where we work and live – the Gadigal and Bidjigal peoples who traditionally occupied the Sydney coast. We pay our respects to Elders past and present. We celebrate the stories, culture and traditions of Aboriginal and Torres Strait Islander Elders of all communities who also work and live on this land.
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