New York regulator issues a cyber-insurance risk framework

Patrick Bracher, Norton Rose Fulbright

Concerned about pandemic-related extra cyber activity, the rise in ransomware and recent cyber-espionage campaigns, the New York State Department of Financial Services (DFS) issued a cyber-insurance risk framework on 4 February 2021.

After describing the risks for insurers and concluding that insurers play a critical role in mitigating and reducing the risks of cyber-crime, the Framework recommends the following approach by insurers proportionate to their risks:

• Establish a formal cyber-insurance risks strategy;
• Manage and eliminate exposure to silent cyber-insurance risk;
• Evaluate systemic risk;
• Rigorously measure insured risks;
• Educate insureds and insurance producers;
• Obtain cyber security expertise; and
• Require notice to law enforcement.

Every insurer should consider the detailed advice given in the Framework.
The link can be found here.

First published by: Financial Institutions Legal Snapshot