On March 10, 2020, the New York Department of Financial Services (“DFS”), which regulates a wide variety of financial institutions, including banks, insurance companies, and investment advisors doing business in New York, issued a series of letters regarding the response to the Novel Coronavirus (“COVID-19”).   In addition to providing guidance, DFS has asked all regulated financial institutions to provide “assurance” that they have plans to address the operational and financial risks associated with COVID-19.  A copy of the letter to regulated financial institutions can be found here, and here, a copy of the letter to regulated insurance entities can be found here; and a copy of the letter to regulated institutions engaged in cryptocurrency businesses can be found here.   The DFS has asked these institutions to provide reports regarding their plans “as soon as possible,” but no later than April 9, 2020.

Specifically, DFS has advised these institutions that their plans should “be sufficiently flexible to effectively address a range of possible effects that could result from COVID-19, and reflect the entity’s size, complexity and activities.”  DFS has stated, however, that response plans for both financial institutions and insurance companies should address:

  1. Preventative measures to mitigate the risk of operational disruption, including the impact on consumers and vendors;
  2. A strategy addressing the impact of the outbreak in stages;
  3. An assessment of the facilities, systems, policies and procedures necessary for continued operations and services, if staff is working off-site, and the effectiveness and security of remote access;
  4. Employee protection strategies that will sustain an adequate workforce, which includes employee awareness and steps to reduce the spread of COVID-19;
  5. Assessment of the preparedness of critical third-party service providers and suppliers;
  6. Plans for communicating with consumers, vendors, and employees;
  7. Procedures for testing response plan to ensure effectiveness;
  8. Governance and oversight of the plan, including identifying the critical members of a response team, to ensure ongoing review and updates to the plan, including the tracking of relevant information from government sources and the entity’s own monitoring program.

Furthermore, DFS has advised “regulated financial institutions,” which would include certain banks, credit unions, and investment advisors, that their response plans must include “an assessment of potential increased cyber-attacks and fraud.”

Although DFS’ guidance to insurance carriers did not highlight the issue of cyber-attacks and fraud, given the projected public health impact of the COVID-19 crisis, insurers should also be prepared to address a large volume of claims for health, disability and life insurance, and take appropriate action to ensure timely and accurate claims handling.  Finally, DFS closed each letter by reminding the boards of directors and senior management of the regulated insurance entities that they are responsible for ensuring that they have adequate plans to respond to the COVID-19 crisis and to communicate those plans to their employees, customers, and vendors.

EBG lawyers are working with clients to ensure they are prepared to respond to the challenges of the COVID-19 crisis, and we are available to help you formulate your plans and response to DFS’ request for assurances.

Back to Workforce Bulletin Blog

Search This Blog

Blog Editors

Authors

Related Services

Topics

Archives

Jump to Page

Subscribe

Sign up to receive an email notification when new Workforce Bulletin posts are published:

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.