The impact of CPS 230 on service providers depends on their classification by APRA or insurers as “in scope.” This applies if they perform a “critical operation” for the insurer or have a “material agreement” with the insurer.

Who is “in scope”?

APRA defines “in scope” service providers as those who:

• Handle claims under their own AFS license (e.g., third-party claims administrators).
• Provide systems or infrastructure supporting critical operations (e.g., core technology).
• Perform critical or material functions, such as underwriting (primarily agencies).

Other suppliers may be classified as “in scope” at the insurer’s discretion, based on the following factors:

1. Does the insurer’s customer base rely heavily on the service provider?
2. Is the service critical to the insurer’s operations?
3. What would the impact on customers and the insurer be if the service fails?
4. Is there a viable substitute for the service to minimize disruptions?

Service providers with potential failures that could significantly impact customers or insurers are likely to fall within CPS 230’s scope.

Obligations for “in Scope” providers

If classified as “in scope,” insurers may require service providers to:

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