IT Risks In Insurance: Thailand’s Regulator Sets Criteria For Monitoring And Managing.
Legal News & Analysis - Asia Pacific - Thailand - Insurance & Reinsurance - Telecommunications, Media & Technology
19 January 2021
Thailand’s Office of the Insurance Commission (OIC) recently issued two notifications—one for life-insurance companies and another for insurance companies—establishing key criteria and requirements for insurance companies to manage risks relating to IT and cybersecurity.
The notifications, entitled Notifications Re: Criteria for the Supervision and Management of Risks Relating to Information Technology for Life/Non-life Insurance Companies B.E. 2563 (2020) came into effect on January 1, 2021, and cover eight major aspects of IT risk management as detailed below.
Insurance companies are required to monitor and manage IT risks and cyber threats in accordance with the size, characteristics, complexity, and context of their business operations, and each company should have at least one director with knowledge of, or past experience in, the field of information technology.
IT Project Management
Insurance companies are required to develop a written framework for IT project management, covering at least the commencement, implementation, and control of the project, as well as the project closing and post-project auditing. Companies must also appoint a committee for supervising and monitoring IT projects.
Insurance companies are required to institute a written IT security policy, which must be reviewed at least once a year or upon implementing any significant changes. The policy must be approved by the board of directors, or a relevant subcommittee appointed by the board of directors.
In outsourcing IT activities to third-party service providers, or entering into any arrangement that allows business partners to connect to or access the company’s IT system, insurance companies are required to specify their own criteria and procedures for the selection of third-party service providers, enter into a written service agreement and a service level agreement with the third-party provider, and conform with other requirements under the notifications. Insurance companies will also be required to comply with the OIC’s forthcoming guidelines on the criteria for the supervision of IT outsourcing to third-party service providers.
IT Risk Management
Insurance companies must also write an IT risk management policy and review it at least once a year, or upon implementing any significant changes. This policy must also be approved by the board of directors or their appointed subcommittee. The companies must also have procedures for IT risk assessment, treatment, monitoring, and reviews.
Insurance companies are required to implement the required measures for IT compliance to conform with applicable laws and regulations concerning IT and anti-money laundering.
Insurance companies are required to have at least one internal or external IT auditor with experience and expertise in IT auditing. Companies are also required to establish a plan and scope for IT audits, which must be approved by the audit committee and reviewed at least once a year, or upon implementing any significant changes. The IT audit reports must be approved by the audit committee and kept at the company office.
Insurance companies are required to establish a framework and guidelines for supervision of and protection against cyber threats, in accordance with cybersecurity laws and commensurate with the size and complexity of their business operations. They must also implement required measures against cyber threats, including risk identification, protection, detection, and countermeasures.
Insurance companies are obligated to report cyber threat incidents to the OIC, and other threats that affect their IT systems, in the following cases:
They become aware of any material issue or incident regarding the use of IT that affects the company’s services, systems, reputation, or the data of insured parties. These incidents include cases where a company’s material IT is subject to an actual cyberattack, or there is a potential threat of a cyberattack, that must be reported to the company’s chief executive officer. In this circumstance, the companies are required to report the incident to the OIC, along with other required details, immediately upon becoming aware of it.
They are subject to an attack from any cyber threat causing issues or incidents relating to the provision of critical IT infrastructure. These incidents must be reported to the OIC, or the responsible cybersecurity authority as required under the law, without delay and within 72 hours.
For further information, please contact:
Sappaya Surakitjakorn, Tilleke & Gibbins