Compliance

NYDFS FINES NATIONAL UNION INSURANCE $5.6 MILLION FOR FAILURE TO PROVIDE SUFFICIENT BENEFITS TO CERTAIN INSUREDS

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NYDFS took action against another insurance firm.  According to the DFS allegations: •   The benefits of blanket accident and health insurance policies issued to groups including institutions of higher education, day camps and childcare providers were found not bear a reasonable relationship to the premiums paid by these insureds. •   The minimum loss ratios maintained by National … Read more

NYDFS SUPERINTENDENT HARRIS UPDATES WASHINGTON BANKING CONFERENCE

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Speaking at the Institute of International Bankers Annual Conference in DC, Superintendent Harris discussed the following: •      CHARACTER AND FITNESS FOR BANKING EXECS: Superintendent Harris responded to “the buzz” about this recent DFS guidance, saying it should be unsurprising that regulated banks would want to screen out personnel in sensitive positions with criminal records, dire financial problems, … Read more

NYDFS PENALIZES WORLD’S LARGEST BANK BY ASSETS – ICBC– $30 MILLION FOR VIOLATING BSA/AML/OFAC AND CONFIDENTIAL SUPERVISORY INFORMATION REGULATIONS

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According to the DFS allegations (and other public information): •   State-owned Industrial and Commercial Bank of China has $22 Billion in assets in the New York branch alone, and over $5 Trillion globally, and is the world’s largest bank by assets according to the WSJ and third largest by capitalization according to Forbes. •   ICBC entered into … Read more

NYDFS SEEKS COMMENT ON ARTIFICIAL INTELLIGENCE GUIDANCE FOR INSURANCE CARRIERS

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•   DFS has issued draft guidance that “outlines DFS’s expectations for how insurers develop and manage the integration of external consumer data and information sources (‘ECDIS’), artificial intelligence systems (‘AIS’), and other predictive models to mitigate potential harm to consumers.” •   According to DFS: “The use of external consumer data and information sources (‘ECDIS’) and artificial intelligence systems … Read more

NYDFS PENALIZES CROSS-BORDER PAYMENTS TRANSMITTER “PAYONEER” $1.25 MILLION FOR OFAC COMPLIANCE DEFICIENCES

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Enforcement takeaways from the Consent Order (per DFS allegations): •   After doing a lookback, Payoneer discovered it had engaged in approximately $793,000 worth of transactions with persons or entities in sanctioned countries during the period Iran, Sudan, Syria and individuals on the SDN List between 2013 and 2018 •   Payoneer self-disclosed these violations to OFAC, which settled … Read more

NYDFS INTEGRAL TO NY STATE NEW CYBERSECURITY STRATEGY

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According to the strategy released by New York governor Kathy Hochul: “Financial Sector[:] In 2017, the New York State Department of Financial Services (DFS) became the first banking or insurance regulator in the nation to establish a cybersecurity division to protect consumers and industries from cyber threats. DFS also created first-in-the-nation requirements for DFS-regulated banks, … Read more

NYDFS $1.35 MILLION CYBERSECURITY ENFORCEMENT ACTION AGAINST WEALTH MANAGER SA STONE

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NYDFS entered into a Consent Order for alleged cybersecurity violations against wealth management firm SA Stone, which sells insurance products to customers.  According to DFS allegations: •        SA Stone is an independent broker/dealer focusing on wealth management, holding licenses to sell insurance to its customers in New York. •        SA Stone experienced several reportable cybersecurity breaches arising … Read more

NYDFS SUPERINTENDENT HARRIS TESTIFIES BEFORE CONGRESS

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FROM NYDFS SUPERINTENDENT HARRIS’ PREPARED TESTIMONY BEFORE US SENATE BANKING COMMITTEE ON DFS REFORMS FOLLOWING BANKING CRISIS: “DFS has been monitoring the liquidity of [high risk] institutions on a daily basis, which entails frequent engagements with these institutions, as well as close coordination with our federal counterparts. . . . I directed DFS’s Office of … Read more

NYDFS PROPOSES NEW GUIDANCE ON VETTING BANKING OFFICERS AND DIRECTORS

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according to the proposed guidance: ·  “Covered Institutions are expected to update and modernize their policies and procedures to require vetting of Designated Persons—including senior officers and members of any governing board—both at onboarding and on a regular ongoing basis, to ensure a robust initial vetting and to confirm that no new circumstances or conflicts … Read more

NYDFS VIRTUAL CURRENCY CHIEF PETER MARTON TESTIFIES BEFORE NY SENATE BANKING COMMITTEE

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DFS Virtual Currency Peter Marton testified on April 25 before the New York Senate Banking Committee.   Some takeaways from his testimony: •   Virtual currency division has hired 40 new staff since Jan. 2022, with total reports of 57 •   The application backlogs remains; DFS has granted four BitLicenses in last 15 months •   The application queue remains high, but … Read more