Insurance Outsourcing: A Legal Analysis

Monika Szaraniec

doi:10.1007/978-3-030-85817-9_4

Abstract

AbstractOutsourcing plays an important role in the operation of insurance and reinsurance companies. This article aims to define the legal conditions of insurance outsourcing and their evaluation by the author. The example of limiting the scope of outsourcing in the activities of insurance and reinsurance companies in the Polish law shows its specificity compared to other outsourcing in business. This specificity lies primarily in the need to control insurance outsourcing by the EU and national supervisory authorities. There is a tendency in the law to extend the regulations related to insurance outsourcing to the further performance of a process, service or activity by insurance companies, particularly in the field of cooperation of traditional distributors withInsurtech. The lack of legal regulations forces EIOPA to look for appropriate and effective legal solutions in the field of supervision over insurance outsourcing. This process is mainly based on self-regulation of the market through ‘soft law’—this practice sets new tasks for the EU and national regulators.

Highlights

Despite certain legal restrictions of the objective scope of outsourced activities and liability of the insurance undertaking for the data provided within the framework of an outsourcing contract, such undertakings decide to outsource to external entities an increasing amount of activities
It is extremely crucial to specify the legal framework for outsourcing because, in practice, almost every contract concluded by an insurance undertaking or reinsurance undertaking with an external provider should be analysed in the context of the abovementioned legal provisions
Solvency II creates a specific concept of insurance outsourcing, which shows features that distinguish it from the general approach to the outsourcing process

Summary

Introduction

Despite certain legal restrictions of the objective scope of outsourced activities and liability of the insurance undertaking for the data provided within the framework of an outsourcing contract, such undertakings decide to outsource to external entities an increasing amount of activities. The EU legislator strives to adjust legislation to the evolving business reality, which is evident in the increasingly precise legal regimes of outsourcing, especially in EIOPA Guidelines. A major role in the process of concluding outsourcing agreements is played by supervisory authorities, which monitor the outsourcing process and anticipate possible negative results.

Szaraniec

Definitions of Outsourcing

Outsourcing Types