This week we highlight a speech by Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, on cybersecurity and retail investor protection. In her remarks, she addresses the key priorities of the Enforcement Division in its allocation of resources, including its focus on retail investors, cyber-related issues, the conduct of investment advisers and broker-dealers, financial fraud and disclosure issues, and insider trading.
On October 11, 2017, the National Association of Insurance Commissioners and the Stanford Cyber Initiative held a joint conference on various topics related to cyber insurance. Below are key takeaways and hot topics discussed by the panelists:
- Companies are becoming increasingly interested in brand/intellectual property coverage to mitigate intangible harm. Some panelists expressed that this is the biggest unmet need in cyber insurance. They suggested one way to address this gap may be to add a special BIPD component to cyber policies.
- There is a rising demand among small and medium-sized businesses (SMB) for cyber insurance that panelists attributed to an increasing realization that a single breach can be catastrophic. While SMBs do not have access to the same range of coverage as larger companies, the industry is working to identify a sustainable method to provide services at palatable rates.
- Panelists reported that they are running models where 100 percent loss is assumed, which is transforming the way they consider and map risk. Some panelists suggested cyber policies should be structured and priced similarly to terrorism-risk programs.
- Pricing of cyber policies was a reoccurring theme throughout the conference, with all of the panelists seeming to agree that the price of policies is currently too low and that insurance companies should do more to incentivize quality cyber practices through differential pricing. One panelist promoted the idea of forcing companies to reduce unnecessary complexity in their systems to reduce price, while another suggested that insurance companies price policies based, in part, on a real-time analysis of the cyber health of the entity from an external perspective.
This week, we share a group of short videos put together by Goldman Sachs that we found very interesting. Their experts shed light some of the new and emerging words and phrases that are important to know in today’s economy. We found it thought provoking as we think more about how technology is shaping the way we work and live.
Government contractors are subject to cybersecurity requirements, found in the Federal Acquisition Regulation (FAR) and each agency’s supplement to the FAR, and some important deadlines are fast approaching. Set forth below is a high-level overview of cybersecurity requirements found in the FAR and the Department of Defense (DoD) FAR Supplement (DFARS).
This week we highlight a study by the EY Center for Board Matters, “Audit Committee Reporting to Shareholders in 2017.” EY reviewed audit committee-related proxy disclosures by Fortune 100 companies to examine trends in voluntary reporting and finds a continued increase in voluntary audit committee disclosures to shareholders.
This week we highlight Bloomberg BNA’s analysis “Corporate Cyber Risk Disclosures Jump Dramatically in 2017,” which examines SEC annual and quarterly filings from 2010 to June 30, 2017. The findings show that more public companies are citing cybersecurity as a risk in their financial disclosures in the first half of 2017 than in all of 2016, suggesting that board and C-suite fears over data breaches may be escalating.
This week we highlight PWC’s report on How your board can be ready for crisis, addressing key challenges for directors during a crisis and discussing how being prepared gives a company better odds of bouncing back smoothly. This analysis reviews the elements of effective crisis management plans and the importance of an escalation plan between management and the board, among other issues.
On June 30, Congress gaveled out for the July 4 recess after postponing a critical vote to begin debate on an Affordable Care Act (ACA) repeal-and-replace bill. Senate Majority Leader Mitch McConnell (R-KY) and the GOP caucus have worked for the last two months in countless hours of behind-the-scenes meetings on what many believe to be a long-shot effort to unite 50 of the 52 Republican senators.