AIA Provides National Institute of Standards and Technology with Cybersecurity Insurance Overview

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The American Insurance Association (AIA) emphasized in comments to the President’s Commission on Enhancing National Cybersecurity (Commission) the benefits of cyber insurance and the importance of allowing the market to evolve organically while avoiding unintended obstacles that may stifle innovation and growth.

The American Insurance Association (AIA) emphasized in comments to the President’s Commission on Enhancing National Cybersecurity (Commission) the benefits of cyber insurance and the importance of allowing the market to evolve organically while avoiding unintended obstacles that may stifle innovation and growth. The comments were filled in response to the Commission’s request for information on 10 enumerated topics, which included “cybersecurity insurance.”

The Commission is expected to release a report by the end of December making detailed short-term and long-term recommendations to strengthen public and private cybersecurity. A request for information for the President’s Commission on Enhancing National Cybersecurity was issued to help complete the formal recommendations.

A statement from Angela Gleason, AIA Counsel follows:

“Many AIA members are significantly involved in the cyber insurance market and have an interest in the Commission on Enhancing National Cybersecurity’s (Commission) curiosity in cyber insurance.

Similar to other emerging and complex risks, insurance is a valuable tool in crafting a risk management program. Insurance is a useful targeted risk transfer mechanism and the application process can be a resource to companies as they think through their individual risk assessments. As such, insurers are investing time and effort to innovate and grow the market responsibly to meet the increasing consumer demands.

However, cyber insurance is only one aspect of a far broader solution to increasing our nation’s cyber resiliency and should not be seen as the driving force to changing behavior or ensuring adherence to government-developed standards. Creating greater cyber resiliency is a societal obligation achievable with the involvement of both the public and private sectors, as a whole, coming together to share information and best practices to manage this growing and evolving risk.

Our comments provided background on the cyber insurance product and its value, but also urged policymakers to exercise caution when contemplating legislative or regulatory activity to avoid potentially stifling innovation and growth in the cyber insurance market. By allowing the market to develop at a responsible pace, over time, the government will enable a healthy evolution of the role of insurance in the larger cyber environment.”

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