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Keypoint: New York’s Division of Financial Services (DFS) now requires Property and Casualty Insurers writing cyber insurance to comply with the Division’s Cyber Insurance Risk Framework to manage their risk.
In her letter introducing the Cyber Insurance Risk Framework, DFS Superintendent Linda Lacewell states that the increase in frequency and cost of ransomware has not only shown that cybersecurity is of critical importance to modern life, but also that cyber insurance plays a vital role in the mitigation and reduction of risk from ransomware.
According to its 2020 survey, DFS found a 180% increase in the number of ransomware claims between 2018 and 2019, with an increase of 150% on average for the costs associated with those claims. The problem continued in 2020, where DFS received nearly double the number of reports of ransomware attacks from the year prior. Not only are these trends a concern for consumer protec
New York Department of Financial Services Issues First-of-Its-Kind Cyber Insurance Risk Framework
On February 4, 2021, the New York Department of Financial Services (DFS) issued Circular Letter No. 2, which introduced a Cyber Insurance Risk Framework directed to New York-regulated property/casualty insurers that outlines best practices for managing cyber insurance risk. The framework is the first-ever guidance by a U.S. regulator on cyber insurance.
Background
In its introduction to the framework, DFS noted that as cybercrime continues to increase for all organizations, cyber insurance is playing an increasingly important role in managing and reducing cyber risk. While cybercrime in general is on the rise, DFS reported that the “biggest driver” of the increase was the frequency and cost of ransomware attacks. According to a 2020 DFS survey, from early 2018 to late 2019 the number of insurance claims that arose from ransomware increased by 180%, and the average cost of a ransom
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The New York State Department of Financial Services recently issued guidance for New York-regulated property and casualty insurers to effectively manage the cyber insurance risk present in their insurance portfolio. The DFS’ guidance signals an effort to reduce overall volatility in the cyber insurance market, which has been compounded by the recent proliferation of cyberattacks and by insurers’ widely varying approaches to measuring each policyholder’s cyber risk profile.
Although the DFS’ Cyber Insurance Risk Framework applies primarily to New York-regulated property and casualty insurers that write cyber insurance, the framework cautions that insurers that do not write cyber insurance nevertheless should evaluate their potential exposure to “silent risk” in their non-cyber insurance policies. Further, as the DFS has taken the lead in recent years among insurance regulators on cybersecurity issues, the frame
NYDFS Publishes Cyber Insurance Risk Framework, Warns of Silent Cyber | Bradley Arant Boult Cummings LLP jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
The New York Department of Financial Services ("NYDFS") recently released its Cyber Insurance Risk Framework (the “Framework”), which provides best practices for managing cyber.