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Examining the Regulatory Landscape Al Berman DRI International NEDRIX Annual Conference October 20, 2009.

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Presentation on theme: "Examining the Regulatory Landscape Al Berman DRI International NEDRIX Annual Conference October 20, 2009."— Presentation transcript:

1 Examining the Regulatory Landscape Al Berman DRI International NEDRIX Annual Conference October 20, 2009

2 DRI International – Who Are We? A Non-Profit Organization Committed to: – Promoting a base of common knowledge for the continuity management industry – Certifying qualified individuals in the discipline of Business Continuity – Promoting the credibility and professionalism of certified individuals Celebrating out Twentieth Anniversary in The Industrys Premier Education and Certification Program Body

3 DRII has Certified INDIVIDUALS in over 90 Countries. DRII conducts training courses in over 40 countries. More individuals choose to maintain their certification through us than all other organizations in our industry combined (Over 7,500 active individuals as of 2008) DRII Certifies individuals in English, Spanish, French, Japanese, Mandarin (expanding to Portuguese and Russian this year, Italian and Korean early next year) DRI International – Who Are We?

4 4 Consumer Credit Protection Act OMB Circular A-130 FEMA Guidance Document Paperwork Reduction Act ISO (Previously ISO17799) FFIEC BCP Handbook Computer Security Act 12 CFR Part 18 Presidential Decision Directive 67 FDA Guidance on Computerized Systems used in Clinical Trials used in Clinical Trials ANSI/NFPA Standard 1600 Turnbull Report (UK) ANAO Best Practice Guide (Australia) SEC Rule 17 a-4 FEMA FPC 65 CARJHACO Sarbanes-Oxley Act of 2002 HIPAA, Final Security Rule FFIEC BCP Handbook -2003/ 2008 Fair Credit Reporting Act NASD Rule 3510 NERC Security Guidelines FERC Security Standards NAIC Standard on BCP NIST Contingency Planning Guide FRB-OCC-SEC Guidelines for Strengthening the Resilience of US Strengthening the Resilience of US Financial System Financial System NYSE Rule 446 California SB 1386 Australia Standards BCM Handbook GAO Potential Terrorist Attacks Guideline Guideline Federal and Legislative BC Requirements for IRS Requirements for IRS Basel Capital Accord MAS Proposed BCP Guidelines (Singapore) (Singapore) NFA Compliance Rule 2-38 FSA Handbook (UK) BCI Standard, PAS 56 (UK) Civil Contingencies Bill (UK) Post-9/11 Pre-9/ FPC 65 NYS Circular Letter 7 ASIS State of NY FIRM White Paper on CP NISCC Good Practices (Telecomm) Australian Prudential Standard on BCM HB221HB292BS25999 SS507 – SS540 TR19 CA Z1600 ISO/PAS HiTech Act of 2009 DRII Title IX –

5 5 BCP Standards for Financial Institutions Federal Financial Institutions Examination Council (FFIEC) BCP Handbook – Business continuity planning is about maintaining, resuming, and recovering the business, not just the recovery of the technology. – The planning process should be conducted on an enterprise-wide basis. – A thorough business impact analysis and risk assessment are the foundation of an effective BCP. – The effectiveness of a BCP can only be validated through testing or practical application. – The BCP and test results should be subjected to an independent audit and reviewed by the board of directors. – A BCP should be periodically updated to reflect and respond to changes in the financial institution or its service provider(s). not just the recovery of the technology

6 6 BCP Standards for Financial Institutions NASD Rule 3510 Rule 3510 will require a business continuity plan that addresses, at a minimum: – Data back-up and recovery (hard copy and electronic) – Mission critical systems – Financial and operational assessments – Alternate communications between customers and the firm – Alternate communications between the firm and its employees – Business constituent, bank and counter-party impact – Regulatory reporting – Communications with regulators

7 7 BCP Standards for Financial Institutions NYSE Rule 446 National Association of Insurance Commissioners (NAIC) National Futures Association Compliance Rule 2-38 written business continuity and disaster recoveryplan (a) Each Member must establish and maintain a written business continuity and disaster recovery plan that outlines procedures to be followed in the event of an emergency or significant business disruption. The plan shall be reasonably designed to enable the Member to continue operating, to reestablish operations, or to transfer its business to another Member with minimal disruption to its customers, other Members, and the commodity futures markets. written business continuity (a) Members and member organizations must develop and maintain a written business continuity and contingency plan establishing procedures to be followed in the event of an emergency or significant business disruption. Members and member organizations must make such plan available to the Exchange upon request. yearly review (b) Members and member organizations must conduct a yearly review of their business continuity and contingency plan to determine whether any modifications are necessary in light of changes to the member's or member organization's operations, structure, business or location.

8 8 BCP Standards for Financial Institutions (the care that a reasonable man would exercise under the circumstances; the standard for determining legal duty.) Electronic Funds Transfer Act - held that banks were liable for actual damages caused by failing to transfer funds in a timely fashion. This required the establishment of contingency plans to meet the standard of reasonable standard of care (the care that a reasonable man would exercise under the circumstances; the standard for determining legal duty.) Basel Committees Capital Accords and Sound Practices for the Management and Supervision of Operational Risk - Banks should have in place contingency and business continuity plans to ensure their ability to operate on an ongoing basis and limit losses in the event of severe business disruption. – Seventh Principle in Sound Practices for Management and Supervision of Operational Risk Reserve Bank of India - Operational Risk Management - Business Continuity Planning - Business Continuity planning is a key pre-requisite for minimising the adverse effects of one of the important areas of operational risk – business disruption and system failures.

9 FINRA (Financial Industry Regulatory Authority) Business Continuity Planning NASD Rules 3510 and 3520 require firms to create and maintain business continuity plans (BCP) to use in the event of a significant business disruption. Rule filings associated with Business Continuity Planning (SR-NASD ) FINRAs Business Continuity Plan Small Firm Emergency Partner Program: A Voluntary Addition to a Firm's BCP Securities and Exchange Commission / Board of Governors of the Federal Reserve System / Office of the Comptroller of the Currency Joint White Paper on Business Continuity Planning The Disaster Recovery Institute Financial Services Sector Coordinating Council for Critical Infrastructure Protection and Homeland Security 9

10 10 BCP Standards for the Healthcare/Life Science Industries Health Insurance Portability and Accountability Act of 1996 (HIPAA), Final Security Rule 7. Contingency Plan (§ (a)(7)(i)) The plan would include an applications and data criticality analysis, a data backup plan, a disaster recovery plan, an emergency mode operation plan, and testing and revision procedures. We proposed that a contingency plan must be in effect for responding to system emergencies. The plan would include an applications and data criticality analysis, a data backup plan, a disaster recovery plan, an emergency mode operation plan, and testing and revision procedures. In this final rule, we make the implementation specifications for testing and revision procedures and an applications and data criticality analysis addressable, but otherwise require that the contingency features proposed be met. HiTech Act of 2009 – More Reporting of Breaches, More Oversight

11 11 HIPAA BCP REQUIREMENTS Is it enough ???? State privacy laws are NOT preempted by federal privacy rules, unless there is a direct conflict If state law is more stringent, or covers an area not covered by federal rules, state law controls

12 12 BCP Standards for the Healthcare/Life Science Industries FDAs GxP: Good Practices FDA Guidance on Computerized Systems in Clinical Trials IX. SYSTEM CONTROLS B. Contingency Plans by alternate means in the event of failure of the computerized system. Written procedures should describe contingency plans for continuing the study by alternate means in the event of failure of the computerized system. C. Backup and Recovery of Electronic Records Backup and recovery procedures should be clearly outlined in the SOPs and be sufficient to protect against data loss. Records should be backed up regularly in a way that would prevent a catastrophic loss and ensure the quality and integrity of the data. Manufacturing Laboratory Clinical

13 13 BCP Standards for the Energy Industry Federal Electric Reliability Councils (FERC) Security Standards for Electric Market Participants, July 2002 North American Electric Reliability Councils (NERC) Security Guidelines for the Electricity Sector, June 2002 Business Continuity: critical electric resource shall have contingency plans Every participant operating a critical electric resource shall have contingency plans that define roles, responsibilities and actions for protecting the rest of the electric grid and market from the failure of its own critical resources. Those plans should further define the roles, responsibilities and actions needed to quickly recover or reestablish electric grid and market functions, processes and systems, in the event that a critical physical or cyber resource fails or suffers harm or attack. Such plans shall be tested or exercised regularly. Continuity of Business Processes: flexible plans that address key areas such as telecommunications, information technology, customer service centers, facilities security, operations, generation, power delivery, customer remittance and payroll processes. Reduces the likelihood of prolonged interruptions and enhances prompt resumption of operations when interruptions occur. Consider flexible plans that address key areas such as telecommunications, information technology, customer service centers, facilities security, operations, generation, power delivery, customer remittance and payroll processes. It is useful to revise and test plans on a regular basis. It also is advisable to train personnel so they fully understand their roles with respect to the plans.

14 Not Just IT 14 FFIEC – March 2008FFIEC – March 2008 Business continuity planning is about maintaining, resuming, and recovering the business, not just the recovery of the technology. The planning process should be conducted on an enterprise-wide basis. Australian Prudential Standard – April 2005Australian Prudential Standard – April 2005 Business continuity management (BCM) describes a whole of business approach to ensure critical business functions can be maintained, or restored in a timely fashion Monetary Authority of Singapore – June 2003 Business Continuity Management (BCM) is an over-arching framework that aims to minimise the impact to businesses due to operational disruptions. It not only addresses the restoration of information technology (IT) infrastructure, but also focuses on the rapid recovery and resumption of critical business functions for the fulfillment of business obligations.

15 15 Cross-Industry BCP Standards Sarbanes-Oxley Act of 2002 SEC MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS. (a) RULES REQUIRED.The Commission shall prescribe rules requiring each annual report required by section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) to contain an internal control report, which shall (1) state the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and (2) contain an assessment, as of the end of the most recent fiscal year of the issuer, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting. INTERNAL CONTROL EVALUATION AND REPORTING (b) INTERNAL CONTROL EVALUATION AND REPORTING.With respect to the internal control assessment required by subsection (a), each registered public accounting firm that prepares or issues the audit report for the issuer shall attest to, and report on, the assessment made by the management of the issuer. An attestation made under this subsection shall be made in accordance with standards for attestation engagements issued or adopted by the Board. Any such attestation shall not be the subject of a separate engagement. IS THERE BCP IN SARBANES-OXLEY????

16 16 Is There BCP in Sarbanes-Oxley? PCAOB (Public Company Accounting Oversight Board) NO Furthermore, management's plans that could potentially affect financial reporting in future periods are not controls. For example, a company's business continuity or contingency planning has no effect on the company's current abilities to initiate, authorize, record, process, or report financial data. Therefore, a company's business continuity or contingency planning is not part of internal control over financial reporting."

17 17 Is There BCP in Sarbanes-Oxley? Practitioners YES

18 18 Continuity of Operations (COOP) Continuity of Government (COG) FEMA Federal Preparedness Circular (FPC) 65 – Originally Issued – June 1999 – James Lee Witt – Revised – June 2004 – Michael Brown Municipal Governments

19 19 Rating COOP Compliance FEMA 65 Crosswalk

20 20 Are They A Client? FFIEC – Appendix E - Interdependencies - THIRD-PARTY PROVIDERS, KEY SUPPLIERS, AND BUSINESS PARTNERS - outsourcing information, transaction processing, and settlement activities - Institutions should review and understand service providers' BCPs and ensure critical services can be restored within acceptable timeframes based upon the needs of the institution - If possible the institution should consider participating in their providers testing process. HOW FAR DOES THIS EXTEND?????

21 21 Are They A Client? HIPAA – Business Associate (aka Chain of Trust) –the business associate must--(1) implement safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the electronic protected health information that it creates, receives, maintains, or transmits on behalf of the covered entity; (2) ensure that any agent, including a subcontractor, to whom it provides this information agrees to implement reasonable and appropriate safeguards;

22 22 Singapore – The Model for the Future? SS 540 – Revision to TR19 (PDCA – Plan Do Check Act) – New BCM Framework Standard and Certification program for BC/DR service providers Standard for Business Continuity / Disaster Recovery Service Providers (SS507) - Singapore is the first country in the world to introduce a Standard and Certification program for BC/DR service providers. Developed by the Infocomm Development Authority of Singapore and the IT Standards Committee (ITSC), the Standard specifies the stringent requirements for BC/DR service providers. These requirements benchmark against the top practices in the region and stipulate the operating, monitoring and up-keeping of BC/DR services offered. TR19 – Technical Reference 19 - aims to help Singapore based enterprises build competence, capacity, resilience and readiness to respond to and recover from events that threaten to disrupt normal business operations. PROPOSED BUSINESS CONTINUITY MANAGEMENT REQUIREMENTS FOR SGX MEMBERS – May 2008

23 23 China & Japan Chinese Business Continuity Management Committee (CBCM) – Setting Standards for Chinese Emergency Response Business Continuity – Still IT Centric (Committee exists under technology directorate) – Will Greatly Influence its Business Partners Japanese Crisis Management & Prepareness Organization. (CMPO) Business Continuity Advancement Organization. (BCAO)

24 Australia Introducing 3 New Standard Handbook to Align with ISO (Risk Management Standard) – Due for Release in May 2009 – Management Standard – Practice Standard – Audit Standard 24

25 25 Standards Uniform Commercial Code – Preparing for foreseeable business disruption National Institute of Standards and Technology (NIST) – Contingency Planning Guide for Information Technology Systems IT Governance Institute Standards COBIT – Control objectives for information and related technology

26 26 ISO Standards and Business Continuity ISO/TS Applicable to any supplier to automotive original equipment manufacturer ISO (Previously Designated (ISO17799) - Deals with Information Security ISO 9001, Quality Management - Record Retention and Data Availability ISO 14001, Environmental Mgt - Emergency Preparedness and Response - ISO/PAS – Societal Security - Guideline for incident preparedness and operational continuity management Section Contingency Plans The organization shall prepare contingency plans to satisfy customer requirements in the event of an emergency such as a utility interruptions, labor shortages, key equipment failure, and field returns. 11 BUSINESS CONTINUITY MANAGEMENT 11.1 ASPECTS OF BUSINESS CONTINUITY MANAGEMENT Business continuity management process Business continuity and impact analysis Writing and implementing continuity plans Business continuity planning framework Testing, maintaining and re-assessing business continuity plans

27 27 Legal Standards Liability of Corporations Liability of Corporations Liability of Corporate Executives Liability of Corporate Executives Liability to Outside Parties Liability to Outside Parties Standard of Negligence Standard of Negligence – Standard of Care: Prudent Man Doctrine Prudent Man Doctrine Exercise same care in managing company affairs as in managing own affairs. Exercise same care in managing company affairs as in managing own affairs. Informed Business Judgment v. Gross Negligence Informed Business Judgment v. Gross Negligence

28 28 Case Law – Legal Precedence Blake v. Woodford Bank & Trust Co. (1977) – Foreseeable workload – failure to prepare Sun Cattle Company, Inc.vs. Miners Bank (1974) – Computer System Failure – Foreseeable Computer Failure Uniform Commercial Code – Preparing for foreseeable business disruption

29 29 Meeting the Standards US v. Carroll Towing Co. (1947) 1. Probability of Harm (P): the chance that a damaging event will occur 2. Magnitude of Harm (M): the amount of financial damage that would occur should a disaster happen 3. Cost of Prevention (C): the price of putting in place a means of preventing the disasters effects P * M = C

30 30 Negligent Failure To Plan/Prepare – Liability Pandemics 2003 – Canadian Nurses who contracted SARS file suit stating that the Government was Negligent in not preparing for the second wave of the disease after the first wave was identified. Munich Re: American Bar Association

31 31 BS25999 Part 1 is an extension of PAS56 Part 1 is an extension of PAS56 – Guidance – Prescriptive – Not Performance Based Part 2 Part 2 – Certification Body – Specification – Auditable – Create Ability to Demonstrate Compliance Stage 1 – Audit – Initial Assessment – Desktop Review Stage 1 – Audit – Initial Assessment – Desktop Review ­Successful Completion Required Before Moving To Stage 2 Stage 2 -Conformance Audit - Certification Audit Stage 2 -Conformance Audit - Certification Audit ­Demonstrate Implementation ­Failure Requires Corrective Action Plan Which Must be Agreed Upon Completion of Stage 1 & 2 Allows for Application to BS Certification Manager for Certification Completion of Stage 1 & 2 Allows for Application to BS Certification Manager for Certification Surveillance Audits Surveillance Audits (To be fair, British standard BS25999introduced "Maximum Tolerable Period of Disruption" (MTPD), another mind-bender destined for the verbal scrap heap, as well.)

32 BS UPDATE Will be revised and included with ASIS proposed standard. The new proposed ISO/ANSI standard will also include elements of the Dutch standard. The ANSI PINS (Project Initiation Notification System) filing will be reviewed by ANSI by the first week in November 2008 which ends the 30 day PINS comment period A Technical committee will be formed to help create the standard. The technical committee will be open to a mixture of experts SDOs, users, managers, producers, etc. The new proposed standard may face some opposition in that there is an indication that it is in conflict with other ANSI standards The same group concluded unanimously that there is a compelling reason to have this standard. The effort to create and have the new standard approved may take anywhere from 6 months to 2 years to be approved. 32

33 33 PUBLIC LAW IMPLEMENTING RECOMMENDATIONS OF THE 9/11 COMMISSION ACT OF 2007 TITLE IX

34 34 The Holy Grail or SOX for Business Continuity The Program Was Called For In Title IX Of "The Implementing The 9/11 Commission Recommendations Act Of 2007 (Public Law ) Which Addresses A Diversity Of Other National Security Issues As Well. It Was Signed Into Law By The President On August 3, Intent – To Implement The Findings Of The 9/11 Commission – NFPA 1600 Was Recommendation Of Commission For Standard – DRIIs Professional Practices Are The Basis For BCP In NFPA 1600 Will It Become A Standard???? – Voluntary – Non-punitive – Unsuccessful Attempts By Federal Government To Address Private Sector BCM Overcome Investments By Private Sector Strain On Small And Medium Sized Businesses In Supply Chain

35 35 a. Goal of the new program is to provide a method to independently certify the emergency preparedness of private sector organizations, including their disaster / emergency management and business continuity programs. The program focuses on certifying the preparedness of businesses and other private sector entities, and does not involve any individual professional certification. b. The program will be voluntary. c. Key stakeholders are invited to participate in the development of the program. Consultation with a variety of organizations and various sectors is required by the legislation. Program development will likely include involvement by a diversity of private sector advisory groups and others. d. The program will be administered outside of government by 3rd party organizations with experience / expertise in managing and implementing voluntary accreditation and certification programs. e. One or more preparedness standards can be designated. NFPA 1600 is reference by example. f. Existing industry efforts, certifications and reporting in this area will not be duplicated or displaced, but rather recognized and integrated. g. Special consideration will be made for small business. h. Proprietary and confidential information is to be protected. Title IX –

36 Defining The Standard Process Used By Sloan Interdisciplinary Team – Representatives of: ASIS, DRI International, NFPA, RIMS Review Existing Regulations – FFIEC, NYSE, SEC, NASD – NERC – HIPAA Provide Credit for Work Already Done Reduce Start From Scratch Opposition Create Core Elements for Standard 36 Core elements are those basic components that, when implemented within an organizations unique governance and culture, provide the underlying framework to enable the organization to sustain itself in spite of a disruptive event (i.e., the common set of criteria for preparedness, disaster management, emergency management, and business continuity programs...." called for under the law.)

37 Core Elements 13 Become 8 1. Policy statement and management commitment - Scope, program roles, responsibilities, and resources 2. Risk identification, assessments and criticality impact analyses, including legal and other requirements 3. Prevention and Mitigation Evaluation and Planning 4. Incident management (procedures and controls before, during and after a disruption, including emergency management of people, business operations and technology) includes communications 5. Recovery Planning - May be considered to include rebuilding, repairing, and / or restoring 6. Awareness and training 7. Exercises and testing 8. Program revision and improvement 37

38 38 Process Mapping

39 Standards Crosswalk NFPA 1600:2007 Standard on Disaster/ Emergency Management and Business Continuity Programs CSA Z1600 Standard on Emergency Management and Business Continuity Programs DRI International Professional Practices for Business Continuity Planners BS : 2007 Business Continuity Management – Part 2: Specification ASIS International - Organizational Resilience: Preparedness and Continuity Management - Best Practices Standard Probably Become Part of ISO/PAS TR19:2005 Technical Reference for Business Continuity Management (BCM) includes TS507 ISO/PAS 22399:2007 Societal Security: Guidelines for Incident Preparedness and Operational Continuity Management 39 TO BE REPLACED WITH A NEW PROPOSED ANSI/ISO STANDARD UNDER DEVELOPMENT

40 Flexibility Within A Framework Existing Industry Efforts – Regulations FFIEC – NYSE – SEC – HIPAA – NERC – Standards ISO, ANSI, BSI 40 NOT Sarbanes-Oxley

41 1. DHS will designate one or more organizations to act as the accrediting body, and oversee the certification process, and to accredit qualified third parties to carry out the certification program. 2. DHS will separately designate one or more standards for assessing private sector preparedness. 3. DHS will provide information and promote the business case for voluntary compliance with preparedness standards. 4. DHS will monitor the effectiveness program on an on-going basis. 41 Process For Implementation of Title IX

42 Gaining Accreditation 42 ANSI-ANAB

43 Gaining Accreditation 43 ANSI-ANAB DHS

44 44 NFPA gets new DHS support - PRECURSOR TO A STANDARDS CHOICE? The US Department of Homeland Security (DHS) has designated the National Fire Protection Association (NFPA) codes and standards development process as a Qualified Anti-Terrorism Technology (QATT) under the Support Anti-terrorism by Fostering Effective Technologies Act of 2002 (SAFETY Act). NFPA is the first standards development organization to receive this designation. Under provisions of the SAFETY Act, NFPAs codes and standards development process was also certified as an Approved Product for Homeland Security. According to DHS, the SAFETY Act encourages the development and deployment of new and innovative anti- terrorism products and services by providing liability protections. Designation as a QATT and certification as an approved product for homeland security under the SAFETY Act provides legal protections for the NFPA codes and standards development process as applied to anti-terrorism. NFPA is pleased to have its codes and standards development process recognized as an effective anti-terrorism technology which reflects the openness, balance and fairness NFPA strives to achieve in its voluntary codes and standards development process, said NFPA President James M. Shannon. Federal protections under the DHS Designation and Certification are retroactive and recognize NFPAs technologys first date of sale as September 11, Shannon added, The commitment and involvement of NFPA in anti-terrorism standards predates the events of 9/11. NFPA has long been committed to making its codes and standards development process available for the creation and continual improvement of standards used to protect first responders and the public in terrorist events. We believe we have a world-class system which attracts numerous experts from diverse fields to develop codes and standards that mitigate the effects of terrorism on people and property. All NFPA safety codes and standards are developed through a process accredited by the American National Standards Institute (ANSI). The more than 250 technical committees responsible for developing and updating all 300 codes and standards include approximately 4,000 volunteers, representing enforcing authorities, installers and maintainers, labor, research and testing laboratories, insurers, special experts, consumers and other users. NFPA was the developer of the NFPA 1600 Standard on Disaster/Emergency Management and Business Continuity Programs.

45 TITLE IX UPDATE – December 2008 At ANSI – HSSP (Homeland Security Standards Panel ) - DHS unveiled its Voluntary Private Sector Preparedness Accreditation and Certification Program – Proposed Target Criteria for Preparedness Standard Internally developed and will be open for comment when DHS publishes a notice in the Federal Registry December 24, 2008 DHS files notice for comments in the Federal Register. We note that the designated officer will consider adoption of the American National Standards Institute (ANSI) National Fire Protection Association (NFPA) 1600 Standard on Disaster/Emergency Management and Business Continuity Programs (ANSI/NFPA 1600)the standard specifically mentioned in both the statute and the 9/11 Commissions recommendationas well as any other private sector preparedness standards submitted for adoption. 45 AWAITING DHS FEDERAL REGISTRY FILING OF APPLICABLE STANDARDS

46 46 Implications Certification – Benefit To Passing Certification – If You Cant Pass Dont Start Legal – Litigation Standard – Voluntary Negligence No Teeth Non-Punitive Will it meet customer requirements

47 What We Know Right Now Title IX of PL is an unfunded effort, there are no tangible rewards; e.g., tax reductions in the form of deductions or tax credits to use as an incentive. While there are ongoing efforts to provide some insurance relief for business continuity planning, at this time no such incentives are available – Sloan Foundation Report FEMA has been designated to lead the effort ANSI – will oversee the certification process ­Manage Accreditation ­Accredit third parties to carry out certification ­Collaborate to develop procedures and requirements for certification and accreditation 47

48 Now For The Misinformation 48 Although voluntary right now, these standards could soon be federal mandates for all private industry. - Not To Be Named Consulting Firm in advertising for their webinar Will share their best practices to meet the new "national preparedness standard" known as NFPA 1600 – Not To Be Named Consulting Firm This voluntary program offers a number of potential benefits to the certified organization, including: Possible insurance premium advantages Enhanced credit ratings Competitive differentiation - Not To Be Named Consulting Firm

49 Certification Risk/Reward Reward – May Satisfy Customer Inquiries – Create Uniformity – No Insurance/Rating Advantage Risks – Discoverable (Corrective Action Plan) – May Not Provide Legal Protection Judge and Jury Decision No Known NFPA1600 Defense – Quality of Auditors – Potential Conflict Financial – Operational Audit Corporate Governance Regulation – Expensive

50 The Problem Literal Interpretation of Using a Standard – Precludes Use of Binding Regulations – Standards are General in Nature No One Standard or Combination of Standards Will Meet Prescriptive and/or Performance Based Standards Standards Are Not Industry Specific ­Evacuation - NRC vs. NFPA ­Data Backup – HIPAA vs. BS25999 ­Recovery Time – SWIFT vs. SS540 Failure to Adapt ``(E) CONSIDERATIONS.--In developing and implementing the program under this subsection, the designated officer shall– ``(i) consider the unique nature of various sectors within the private sector, including preparedness standards, business continuity standards, or best practices, established-- 50

51 Regulations Created by Government/Industry Regulatory Bodies Punitive – Fines – Shutdown Subject to (Operational/Financial) Audit – Annually Audit Conducted by Third Party Results are Board Issues May Create Vendor Requirements – FFIEC – HIPPA

52 Standards Voluntary Non-Punitive Auditable Through First, Second or Third Parties State of Flux – NFPA 1600 is the ANSI National Standard is in Revision for 3 rd Quarter 2009 Release – ASIS/BS25999 are Currently in the Early Stages of Seeking ANSI Accreditation not Due until at Least End of 2009 – ISO 22399/PAS (Publicly Available Specifications) Interim State – New Australian Standard – New Singapore Standard – ………………………………..

53 53 The Answer Aim is Preparedness Preparedness Elements Are Defined Sloan ANSI-ANAB Pick What is Appropriate Financial Requirements Utility Requirements Satisfy Industry Requirements

54 54 The Answer Satisfy Industry Requirements Industry Specific One Size Doesnt Fit All Acceptable to Private Sector Meets the Spirit of the Law Cost Effective – Single Audit – No Audit Conflict Gain Momentum – Quick Certification for 1,000s

55 55 Next Steps QUALIFYING CERTIFYING BODY – Meet ANSI-ANAB Requirements – Designed for SMEs (Emergency/Disaster Management and Business Continuity to Understand Audit Concepts) – Designed for Auditors (To Understand Emergency/Disaster Management and Business Continuity) – Earn a CBCA (Certified Business Continuity Auditor) or CBCLA (Certified Business Continuity Lead Auditor) – Provide Consistency – Provide Recognition Help Auditing, Help Professionals – Self Assessment – Second Party Assessment – Third Party Assessment

56 Q & A Thank You 56 Statements concerning legal matters should be understood to be general observations based solely on our experience as risk consultants and should not be relied upon as legal advice, which we are not authorized to provide. All such matters should be reviewed with your own qualified legal advisors in these areas


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