Regulatory notifications
5. Does the outsourcing need to be notified to the regulator?

In the case of outsourcing critical or important insurance functions (excepting branches of foreign institutions), the Autorité de Contrôle Prudentiel et de Résolution ("ACPR") must be informed beforehand. An "instruction" details the procedure to be followed.

The obliged entity must do the following:

  • Describe the scope of the outsourced activities or functions.
  • Explain the reasons that led to the outsourcing.
  • Indicate the name of the cloud service provider and, where the outsourcing involves a key function, the name of the person responsible for the delivery of the service.

Further, the obliged entity must do the following:

  • Demonstrate that outsourcing is not likely to seriously compromise the quality of the governance system, unduly increase operational risk or adversely affect the continued provision of a satisfactory level of service to policyholders.
  • Specify the provisions in the outsourcing agreement that ensure the cloud service provider cooperates with the ACPR and provides the ACPR with the necessary access.

The ACPR must be informed six weeks before the outsourcing arrangement enters into force.

The same applies for payment services providers and e-money institutions that intend to outsource operational functions of payment services or of issuing and managing electronic money. They must inform the ACPR before outsourcing such functions.