The potential formation of a federal backstop for commercial cyber insurance markets in the wake of a catastrophic cyber event has drawn support from risk management and insurance industry organizations.
The terrorism backstop formed after the Sept. 11, 2001, terrorism attacks could serve as a basic model for a cyber backstop, but factors such as funding and the structure of coverage need to be addressed, proponents say.
Last month, the Risk & Insurance Management Society Inc. sent a comment letter to the U.S. Treasury Department’s Federal Insurance Office saying its members “overwhelmingly supported” the creation of a federal cyber insurance backstop.
The letter was in response to a Sept. 29 notice from the Treasury seeking comments “on questions related to cyber insurance and catastrophic cyber incidents.” The initial deadline to submit comments was Nov. 14, which was extended to Dec. 15.
“Cyber insurance is a significant risk-transfer mechanism, and the insurance industry has an important role to play in strengthening cyber hygiene and building resiliency,” the Treasury notice said.
The notice followed a June report from the…
