The National Association of Insurance Commissioners (NAIC) has approved its draft of the Insurance Data Security Model Law (Model Law) via a meeting of its Executive and Plenary Committees. This important development follows New York Department of Financial Services (“DFS”) Cybersecurity Requirements for Financial Services Companies regulation that took effect on March 1, 2017 (DFS Cybersecurity Regulation) that we have covered previously.
NAIC likely recognizes that the numerous data breaches that have occurred over the past year have created an opportunity to build upon the momentum created by the DFS Cybersecurity Regulation, and provide an environment of comprehensive compliance requirements to protect Licensees and Consumers. Indeed, the Model Law even contains Drafting Note stating that:
The drafters of this Act intend that if a Licensee, as defined in Section 3, is in compliance with N.Y. Comp. Codes R. & Regs. tit.23, § 500, Cybersecurity Requirements for Financial Services Companies, effective March 1, 2017, such Licensee is also in compliance with this Act.
In many cases, model laws approved by NAIC, a U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories, are approved within these jurisdictions as binding law. Below is a high level overview of particularly salient points of the Model Law. Continue Reading Insurance Commissioners Approve Data Security Model Law