Understanding the Recent Changes to New York's Cybersecurity Regulations
In the ever-evolving landscape of cybersecurity, regulations play a crucial role in safeguarding sensitive information and ensuring accountability in the event of breaches or incidents. New York State has been at the forefront of such efforts with its Cybersecurity Regulation, which underwent significant amendments in November 2023, bringing forth new requirements and obligations for covered entities.
Background: Enacted in 2017, the Cybersecurity Regulation by the New York Department of Financial Services (DFS) established stringent cybersecurity standards applicable to entities and individuals licensed under the New York Insurance Law. Aimed at protecting consumer data and financial information, this regulation has since undergone revisions, with the latest Amendment implemented on December 1, 2023.
Key Changes Under the Amendment:
- Third-Party Incident Reporting: One of the most notable changes introduced by the Amendment is the requirement for covered entities to report cybersecurity incidents occurring at third-party service providers. This means that entities such as insurance agents, producers, and brokers must notify DFS within 72 hours of learning about any incidents affecting their vendors, in addition to those directly impacting their operations.
- Revised Definition of Cybersecurity Incident: The Amendment expanded the definition of a cybersecurity incident to include events occurring not only at the covered entity but also at its affiliates or third-party service providers. This broadened scope ensures comprehensive reporting of incidents with the potential to disrupt normal operations or compromise sensitive data.
- Extortion Payment Notification: Covered entities are now obligated to notify DFS within 24 hours of making any extortion payments related to cybersecurity incidents. Moreover, they must provide detailed explanations regarding the necessity of the payment, alternatives considered, and steps taken to ensure regulatory compliance.
- Annual Certification of Compliance: Beginning April 15, 2024, covered entities are required to submit an annual certification of material compliance or acknowledgment of noncompliance with Part 500 of the Cybersecurity Regulation. This certification must be signed by the highest-ranking executive and the Chief Information Security Officer (CISO) or equivalent officer responsible for cybersecurity.
Action Steps for Covered Entities: In light of these regulatory changes, covered entities, including insurance agents, producers, and brokers, must take proactive measures to ensure compliance:
- Familiarize themselves with the updated regulations and assess their obligations under the law.
- Establish protocols for timely reporting of cybersecurity incidents, including those involving third-party service providers.
- Implement robust cybersecurity measures and regularly review and update their security protocols to mitigate risks effectively.
- Prepare for the annual certification process by documenting compliance efforts and remediation plans, if necessary.
Conclusion: The recent amendments to New York's Cybersecurity Regulation underscore the state's commitment to enhancing data protection and mitigating cybersecurity risks within the insurance industry. By staying informed and adhering to regulatory requirements, covered entities can bolster their cybersecurity posture and foster trust among consumers and stakeholders.
For more information on the Cybersecurity Regulation and reporting requirements, covered entities can refer to the resources provided by the New York Department of Financial Services.
DFS Cybersecurity Resource Center
Instructions for Reporting a Cybersecurity Incident
Instructions for Reporting an Extortion Payment
As the regulatory landscape continues to evolve, it's imperative for covered entities to remain vigilant and proactive in addressing cybersecurity challenges and safeguarding sensitive information against emerging threats.
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