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NewYork Cyber Security Law

New York’s cybersecurity laws (CSLs) became effective on March 1, 2017. These laws are designed to promote the protection of customer information as well as the information technology systems of affected entities. CSLs require affected entities to assess their specific risk profile and design a program that addresses identified risks.
CSLs in New York were issued for the financial industry to address the increasing number of events that put consumer information and financial information systems at risk. As a result, the New York State Department of Financial Services (DFS) has the authority to enforce compliance with these laws.

New York’s CSLs require each covered entity to maintain a cyber security program that protects the confidentiality, integrity, and availability of its information system (IS). CSLs define a “covered entity” as any person or institution that operates, or is required to operate, under a license, registration, charter, certificate, permit accreditation or similar authorization under banking law, insurance law or financial services law.

A covered entity’s program is based on that entity’s risk assessment and must be designed to:

  1. Identify and assess internal and external cybersecurity risks that may threaten the security or integrity of nonpublic information stored on the entity’s IS;
  2. Use defensive infrastructure, policies, and procedures to protect the entity's IS (and the nonpublic information stored on its IS) from unauthorized access, use or other malicious acts;
  3. Detect cybersecurity events;
  4. Respond to identified or detected cybersecurity events to mitigate any negative effects;
  5. Recover from cybersecurity events and restore normal operations and services;
  6. Limit user access privileges to an IS that provides access to nonpublic information (must review access privileges periodically); and
  7. Comply with all applicable regulatory reporting obligations.

CSLs define a “cybersecurity event” as any act or attempt, regardless of whether it’s successful or unsuccessful, to gain unauthorized access to, disrupt or misuse an IS or the information that is stored within the IS.

Covered entities will be allowed to satisfy their program requirements by adopting the relevant and applicable provisions of a cybersecurity program maintained by an affiliate, but only if those provisions satisfy CSL requirements, as applicable to the covered entity. An “affiliate” is any person or entity that directly or indirectly controls, is controlled by, is under common control with, or can otherwise direct the management and policies of another person or entity. Affiliate control can be established through but is not limited to, the ownership of stock.

Cybersecurity programs must also be designed to reconstruct material financial transactions and include audit trails designed to detect and respond to cybersecurity events that have a reasonable likelihood of harming any material part of the normal operations of the covered entity.
All documentation and information relevant to the covered entity's cybersecurity program must be made available to the DFS upon request. Specifically, covered entities must also maintain records that allow them to reconstruct material transactions for at least five years and audit trail records for at least three years. Any information subject to CSL requirements that are provided by a covered entity is subject to exemptions from disclosure under banking, insurance, financial services, public officers or any other applicable state or federal law.

Nonpublic information includes all electronic information that is not publicly available. This includes:

  • A covered entity’s business-related information, if an unauthorized disclosure, access or use of this information would cause a material adverse impact to the covered entity’s business, operations or security;
  • Any information concerning an individual that because of a name, number, personal mark or other identifiers can be used to identify the individual, in combination with any one or more of the following data elements:
  • Social Security number;
  • Drivers' license number or other identification card number;
  • Account number, including credit or debit card number;
  • Any security code, access code or password that would permit access to an individual's financial account; or
  • Biometric records.
  • Any information or data, except age or gender, in any form or medium created by or derived from a health care provider or an individual and that, relates to:
  • The past, present or future physical, mental, or behavioral health or condition of any individual or a member of the individual's family;
  • The provision of health care to any individual; or
  • Payment for the provision of health care to any individual.

Cybersecurity programs under New York’s CSLs must include a written incident response plan. This plan must be designed to respond promptly to, and help the covered entity recover from, any cybersecurity incident that has a material effect on the confidentiality, integrity or availability of the covered entity’s IS or the continuing functionality of any aspect of the covered entity’s business or operations.
Specifically, incident plans must address:

  • The internal processes for responding to a cybersecurity event;
  • The goals of the incident response plan;
  • The definition of clear roles, responsibilities, and levels of decision-making authority;
  • External and internal communications and information sharing;
  • Identification of requirements for the remediation of any identified weaknesses in information systems and associated controls;
  • Documentation and reporting regarding cybersecurity events and related incident response activities; and
  • The evaluation and revision of the incident response plan following a cybersecurity event (as necessary).