The new cybersecurity regulation in New York is in effect, and will apply to all New York licensed insurance agencies and agents, both resident and non-resident (see our prior post here) effective March 1, with some minor changes (see here).
The New York Department of Financial Services (“DFS”) has finalized its cybersecurity regulation, titled Cybersecurity Requirements for Financial Services Companies (23 NYCRR 500, see here). The regulation, revised from an earlier draft, requires that all entities regulated by DFS must establish and maintain cybersecurity procedures and policies, and must report on their compliance to the DFS (see here).
The exemption appears to be misinterpreted by some, because the exemption is not an exemption from the regulation, it is an exemption from a few of the most onerous parts of the regulation. All resident and non-resident insurance agents will be required to take a series of steps under the regulation (see here). As noted by the IIABNY, the regulation:
…will require all resident and nonresident insurance agencies authorized to operate in New York to take the following measures: [see the article here, and the regulation here]…Insurance agencies must satisfy most of the requirements outlined above within 180 days of the regulation’s March 1 effective date. A series of additional requirements will apply to [larger] entities.
Cyber security is critically important, but as we noted previously, this will be a monstrous task for the industry to implement and the DFS to regulate. And there are still many unknowns, so keep a watch for further information and clarification.
Cyber Risk Insurance is an essential coverage for businesses of all sizes for protection from both criminal attacks and employee error, including insurance agencies. Tennant Risk Services is a specialty wholesale broker and underwriting manager in the placement of professional liability and specialty insurance (E&O, D&O, EPL, Cyber Risk, Specialty).
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