30 October 2017Analysis

NAIC adopts new data security law

The National Association of Insurance Commissioners (NAIC) has adopted the Insurance Data Security Model Law during a joint meeting of the Executive (EX) Committee and Plenary.

"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, 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.

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.

"We've made significant progress on cybersecurity this year and passing this model law creates a platform that enhances our mission of protecting consumers," said Raymond G. Farmer, NAIC secretary-treasurer, South Carolina Insurance Director and chair of the Cybersecurity (EX) Working Group.