Companies that are subject to New York’s Cybersecurity Regulation are moving quickly to finalize their compliance obligations under the Cybersecurity Regulation, as the second “due date” quickly approaches – February 15, 2018. By August 28, 2017, Covered Entities were required to have a cybersecurity program in place, as well as a board (or senior officer) approved written cybersecurity policy and Chief Information Security Officer to help protect data and systems. They also became obligated to report cybersecurity events to the NYDFS. (more…)
On October 26, 2017, the U.S. Department of Treasury released a 176-page Report examining the current regulatory framework for asset management and insurance industries. The Report, titled A Financial System That Creates Economic Opportunities: Asset Management and Insurance, identifies laws and regulations that are inconsistent with the Trump Administration’s Core Principles for financial regulation as set forth in Executive Order 13772 (Feb. 3, 2017), and makes recommendations to ensure alignment. For data privacy and security, the Report commented on the Insurance Data Security Model Law (the “Model Law”) adopted by the National Association of Insurance Commissioners’ (the “NAIC”) on October 24, 2017 (for more information on the development of the Model Law, see our prior coverage). The Model Law attempts to set a baseline for cybersecurity, although it depends on legislative action on the state level. (more…)
The National Association of Insurance Commissioners (NAIC) has created a new task force to monitor technology, data collection and Cybersecurity developments in the insurance industry. The Innovation and Technology (EX) Task Force (IT Task Force) was formed on March 9, 2017 and reports directly to the NAIC’s Executive Committee. The IT Task Force will appoint and oversee the work of the following NAIC groups: the Big Data Working Group, the Cybersecurity Working Group and the Speed-to-Market Working Group. According to the NAIC’s March 9, 2017 press release, the IT Task Force’s purpose is to help insurance regulators stay informed about technology-related developments, products and services in the insurance industry, including start-up companies, and to ensure they meet consumer expectations and ensure consumer protections. The press release notes that annual investment in insurance technology (InsurTech) has increased to more than $2.5 Billion and continues to grow.
On February 16, 2017, the New York State Department of Financial Services (the “NYDFS”) issued its final regulations setting forth minimum requirements for NYDFS-regulated entities to address cybersecurity risk (“Final Regulations”). The NYDFS issued the Final Regulations after considering feedback and criticism received during two comment periods — one following the NYDFS’s initial publication of the proposed regulation (on September 13, 2016) and a second comment period after the NY DFS published a revised version of the regulation (on December 28, 2016.)
The Final Regulations will be effective as of March 1, 2017, with a transitional period of 180 days from that date for Covered Entities to comply with the Final Regulations, except for certain enumerated provisions for which longer compliance periods are specified. The annual certification of compliance (covering the prior calendar year) will be required beginning on February 15, 2018.
On December 28, 2016, the New York State Department of Financial Services (the “NYDFS”) issued revised proposed regulations setting forth minimum requirements for NYDFS-regulated entities to address cybersecurity risk (“Revised Proposed Regulations”). The NYDFS issued the Revised Proposed Regulations after considering feedback and criticism submitted during a 45-day comment period to address the initial proposal, issued on September 13, 2016. The agency has announced an additional and final 30-day comment period from the date of publication to address new comments not previously raised in the original comment process.
On September 13, 2016, the New York State Department of Financial Services (“NYDFS”) proposed regulations outlining minimum requirements for NYDFS-regulated entities to address cybersecurity risk (“Proposed Regulations”). The NYDFS regulates entities and products that are subject to New York insurance, banking and financial services laws. Because the scope of the Proposed Regulations includes any entity “operating under or required to operate under a license, registration, charter, certificate, permit, accreditation or similar authorization under the banking law, the insurance law or the financial services law,” the Proposed Regulations will cover a broad range of entities in the banking, insurance and financial services industries, including insurance producers and premium finance companies.
On May 24-25, 2016, the Cybersecurity (EX) Task Force of the National Association of Insurance Commissioners (NAIC) held a two-day interim meeting in Washington, D.C. to discuss the Task Force’s preliminary draft of a model law outlining data security standards applicable to insurance licensees. The Draft Insurance Data Security Model Law (“the Draft Model Law”), first released for public comment on March 2, 2016, would apply to all licensed insurers, producers and other persons licensed or required to be licensed (or authorized or required to be authorized, or registered or required to be registered) pursuant to state insurance laws (“Insurance Licensees”).
On December 17, 2015, the Executive/Plenary Committees of the National Association of Insurance Commissioners (NAIC) unanimously adopted an amended version of the Cybersecurity “Bill of Rights.” Renamed the “NAIC Roadmap for Cybersecurity Consumer Protections,” the document now states that while the NAIC believes consumers are entitled to the delineated protections, not all are currently provided for under state law.
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.