In a November 9, 2015 letter to members of the Financial and Banking Information Infrastructure Committee (“FBIIC”), the Acting Superintendent of the New York Department of Financial Services (“NY DFS”) outlined key elements of potential new regulations by the NY DFS addressing cybersecurity risk (“Cybersecurity Proposal”) and encouraged FBIIC members to work with the NY DFS in developing a comprehensive cybersecurity framework for all regulated financial institutions. The NY DFS regulates entities and products that are subject to New York insurance, banking and financial services laws. The FBIIC is composed of state and federal agencies that regulate companies and products in the financial services sector, including the U.S. Securities and Exchange Commission (“SEC”), the Office of the Comptroller of the Currency (“OCC”) and the National Association of Insurance Commissioners (“NAIC”). The stated goal of the NY DFS is to stimulate dialogue among federal and state financial regulators to promote collaboration and, ultimately, regulatory convergence.
On October 14, 2015, the Cybersecurity Task Force (Cybersecurity Task Force) of the National Association of Insurance Commissioners (NAIC) adopted a cybersecurity “Bill of Rights” that proposes certain rights for insurance consumers relating to the protection of their personal information by insurance companies, insurance producers and other entities regulated by state insurance departments. The Bill of Rights also outlines specific notices, information and actions that consumers should expect from such entities, particularly in the event of a data breach. This Bill of Rights, if adopted by NAIC’s Executive/Plenary Committees, could ultimately be incorporated in NAIC Model Acts and Regulations, and could be adopted by insurance companies on their own initiative.
On July 27, 2015, the Cybersecurity Task Force (Cybersecurity Task Force) of the National Association of Insurance Commissioners (NAIC) released a draft cybersecurity “Bill of Rights” suggesting certain rights for insurance consumers to have their personal information protected by insurance companies, insurance producers and other entities regulated by state insurance departments. Comments on the draft were due by close of business on August 10, 2015 and a final version could be adopted during the NAIC’s upcoming National Meeting in Chicago in mid-August 2015. The Cybersecurity Bill of Rights is one of several insurance regulatory measures designed to safeguard personal information of insurance consumers, which is particularly vulnerable in data breaches because it often contains social security numbers, financial information, addresses and sensitive medical information. Cybersecurity has become an even higher priority among insurance regulators since the Anthem, Inc. data breach and the NAIC formed the Cybersecurity Task Force to coordinate regulatory efforts in this area.
New legislation out of Hartford means that Connecticut joins Massachusetts in imposing strict state requirements for data protection. S.B. 949. Additionally, the new law amends Connecticut’s data breach notification law, making Connecticut the first in the nation to affirmatively require entities that experience a reportable data breach to offer free credit monitoring to residents affected by the breach. The legislation further imposes significant new requirements on health insurers, as well as contractors that receive confidential information from state agencies, to maintain minimum data security protections. While health insurers have until 2017 to come into full compliance, the requirements for state contractors are effective as of July 1, 2015.