NAIC Passes Insurance Data Security Model Law
October 24, 2017
The National Association of Insurance Commissioners adopted the Insurance Data Security Model Law during a joint meeting of the Executive (EX) Committee and Plenary.
The model law, adopted during National Cybersecurity Awareness Month, creates rules for insurers, agents and other licensed entities covering data security, investigation and notification of breach. This includes maintaining an information security program based on ongoing risk assessment, overseeing third-party service providers, investigating data breaches and notifying regulators of a cybersecurity event.
"Considering the recent series of data breaches, cybersecurity is more important now than ever," said Ted Nickel, NAIC President and Wisconsin Insurance Commissioner. "Regulators have a critical role to play in protecting consumers as the cyber landscape continues to evolve and this model law sets cybersecurity customs for insurers to help safeguard consumers."
The model law includes requirements for:
- Implementation of an information security program
- Objectives of information security program
- Risk assessment
- Risk management
- Oversight by Board of Directors
- Oversight of third-party service providers
- Program adjustments
- Incident response plan
- Annual certification to commission of domiciliary state
- Investigation of a cybersecurity event
- Notification of a cybersecurity event
According to the model act, a licensee with fewer than 10 employees, including any independent contractors, is exempt from implementing an information security program.
The model law progressed through the NAIC Innovation and Technology (EX) Task Force and the Cybersecurity (EX) Working Group during the NAIC's Summer 2017 National Meeting. The working group solicited input from regulators as well as industry and consumer representatives throughout the drafting process.
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