Francine Friedman Quoted in Law360 on Data Security Tax Credit Bill
Francine Friedman, senior policy counsel at Akin Gump, has been quoted in the Law360 article “Data Security Gets New Look With Insurance Tax Credit Bill,” about legislation introduced in the House of Representatives that would give a tax credit to businesses that purchase data breach insurance and adopt a widely respected cybersecurity framework. The bill, the article reports, does not mandate compliance, but instead proposes a 15 percent tax break to those companies that participate.
As with any tax credit proposal, Friedman said the main question is whether it will actually lead to greater adoption of the desired behavior, or if it’s just going to reward companies that are already undertaking the tasks that the bill is hoping to promote.
“It could provide some level of incentive for the insurance marketplace to develop or to increase adoption of the NIST (National Institute of Standards and Technology) framework,” Friedman said, “but as is often the case with these types of bills, it’s hard to know at the outset what impact it will have.” Still, she pointed out that the bill as currently drafted does have a five-year sunset provision that could help in making sure this issue is adequately addressed.
Regardless of how far the bill goes toward passage, the article says the proposal should not be ignored. “The ability to offer the carrot instead of the stick is important,” according to Friedman, “and if a comprehensive bill on this topic were ever to be passed in Congress, this type of incentive could come up and be part of that discussion now that it’s been put out there.”