US Federal Financial Institutions Examination Council Issues Joint Statement Regarding Cyber Insurance

On April 11, 2018, the U.S. Federal Financial Institutions Examination Council members released a joint statement with respect to cyber insurance and its role in risk management. FFIEC members include the Federal Reserve, the OCC and the FDIC. The statement and corresponding press release note that the frequency, sophistication and severity of cybersecurity incidents are increasing. As a result, general insurance policies may not provide adequate coverage in the event of a cybersecurity event and cyber insurance options are increasing and evolving in response to these factors. The statement highlights that cyber insurance options vary greatly, and can be in the form of either a standalone policy or an endorsement to an existing insurance policy. The statement cautions, however, that cyber insurance should be viewed as a risk mitigation tool and not as an alternative to sound internal controls, policies and procedures to guard against cybersecurity events. The statement