Companies subject to New York’s Cybersecurity Regulation are acting quickly to finalize their compliance obligations as the fifth “due date,” September 4, 2018, quickly approaches.
By September 4, 2018, Covered Entities must ensure that their cybersecurity programs have in place certain additional safeguards:
- an audit trail that shows detection of and response to material cybersecurity events;
- written security procedures, guidelines, and standards for the development of in-house applications and for the evaluation and testing of externally developed applications;
- data retention policies and procedures for the disposal on a periodic basis of nonpublic information no longer necessary for business operations;
- risk-based policies, procedures, and controls to monitor the activity of authorized users and detect unauthorized access; and security controls, such as encryption, to protect non-public business relations and personal information.
Notably, for this upcoming deadline, Covered Entities that have received a limited exemption must still comply with the regulatory provision regarding data retention policies and procedures for the periodic disposal of nonpublic information. (more…)
The National Association of Insurance Commissioners (NAIC) held its Summer 2018 National Meeting in Boston, Massachusetts, from August 4 to 7, 2018. This post summarizes the highlights from this meeting. (more…)
In October 2017, the National Association of Insurance Commissioners (NAIC) adopted an Insurance Data Security Model Law. According to NAIC’s news release announcing this development, the Model Law was meant to build on the organization’s cybersecurity progress and create a “platform that enhances our mission of protecting consumers.” (For more information on the development of the Model Law, see our prior coverage.) (more…)
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 held its Summer 2017 National Meeting in Philadelphia, Pennsylvania from August 6 to 9, 2017. This Sidley Update summarizes the highlights from this meeting. (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.
After having received over 150 comments on proposed cybersecurity regulations, the New York Department of Financial Services will delay implementation and initiate a new round of notice and comment on a further revised version of cybersecurity regulations. As we reported previously, NYDFS proposed new cybersecurity regulations for the financial sector in September of this year, and the comment period closed mid-November. NYDFS previously announced that the new rules would be effective January 1, 2017 and that covered entities would have 180 days to comply. Reuters reports that NYDFS will now publish a further revised version of proposed regulations on December 28 for public comment with a new effective date of March 1, 2017.