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📑 '''Insurance data security model law''' is a legislative template developed by the [[Definition:National Association of Insurance Commissioners (NAIC) | National Association of Insurance Commissioners (NAIC)]] in 2017 that establishes standards for [[Definition:Insurance data security | data security]] and breach notification specifically tailored to entities licensed under state [[Definition:Insurance code | insurance codes]] — including [[Definition:Insurance carrier | carriers]], [[Definition:Insurance agent | agents]], [[Definition:Insurance broker | brokers]], and other [[Definition:Insurance licensee | licensees]]. Formally titled the Insurance Data Security Model Law (MDL-668), it was designed to create a uniform baseline across states, addressing the concern that a fragmented regulatory landscape left gaps in [[Definition:Consumer protection | consumer protection]] and imposed inconsistent compliance burdens on multi-state insurers. The model draws significant inspiration from New York's [[Definition:Cybersecurity regulation | 23 NYCRR 500]] regulation, widely regarded as the most rigorous state-level cybersecurity mandate in the country.

🔧 At its core, the model law requires each [[Definition:Insurance licensee | licensee]] to develop, implement, and maintain a comprehensive written information security program tailored to the size and complexity of the entity and the sensitivity of the [[Definition:Nonpublic information | nonpublic information]] it handles. Key provisions include mandatory risk assessments, [[Definition:Vendor management | oversight of third-party service providers]] with access to sensitive data, an incident response plan, and notification to the state [[Definition:Insurance commissioner | insurance commissioner]] within 72 hours of a [[Definition:Cybersecurity event | cybersecurity event]] that meets defined materiality thresholds. Smaller licensees benefit from certain proportionality exemptions — for instance, those with fewer than a set number of employees or below certain revenue thresholds may be excused from specific technical requirements — reflecting the reality that a sole-proprietor [[Definition:Insurance agent | agent]] faces different operational constraints than a large national [[Definition:Insurance carrier | carrier]].

🌐 Adoption has progressed steadily, with a growing majority of states having enacted laws substantially similar to MDL-668, a milestone driven in part by the [[Definition:Financial Sector Assessment Program (FSAP) | NAIC's accreditation]] process, which began requiring adoption as a standard in 2026. For the industry, the model law's spread reduces the compliance patchwork that multi-state [[Definition:Insurance carrier | insurers]] and [[Definition:Managing general agent (MGA) | MGAs]] must navigate, though differences in state-level implementation details still require careful analysis. [[Definition:Insurtech | Insurtech]] companies, many of which operate in numerous states from inception, have a particular incentive to build their security programs around the model law's requirements from the start, treating compliance not as an afterthought but as a foundational element of their operating infrastructure. The model law also reinforces the expectation — shared by [[Definition:Insurance regulator | regulators]], [[Definition:Rating agency | rating agencies]], and business partners — that robust data security governance is a baseline prerequisite for participating in the modern insurance marketplace.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Insurance data security]]
* [[Definition:National Association of Insurance Commissioners (NAIC)]]
* [[Definition:Cybersecurity regulation]]
* [[Definition:Model law]]
* [[Definition:Market conduct]]
* [[Definition:Privacy regulation]]
{{Div col end}}

Definition:Insurance data security model law - Revision history

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