Enforcement

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

by

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

by

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 ENFORCEMENT ACTION AGAINST GENESIS GLOBAL TRADING — $8 MM PENALTY AND LICENSE SURRENDER

by

NYDFS penalized Genesis Global Trading, a licensee that served primarily as an OTC trading shop, $8MM for cybersecurity, BSA/AML, and Consumer Protection violations.  Genesis Global has now surrendered its license, apparently after having ceased trading activity some time ago.  According to DFS allegations: •   Genesis Global did not conduct an enterprise-wide risk assessment until 2022, despite … Read more

THE SHAPE OF ENFORCEMENT TO COME: AMENDMENTS TO THE NYDFS CYBERSECURITY REGULATION

by

My latest post on the blog for the NYU Program on Corporate Compliance and Enforcement deals with enforcement aspects of the recent amendments to the NYDFS Cybersecurity Regulation, Part 500. These recent amendments to the Cybersecurity Regulation (Part 500) of the New York State Department of Financial Services (NYDFS) are quite expansive in scope.[1]  Chief Compliance … Read more

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

by

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 FINES FOUR MORE INSURANCE COMPANIES IN ONGOING MARKET SWEEP INVESTIGATION

by

According to the DFS allegations in the Four Consent Orders (found here): •   Following a market conduct investigation in 2018, DFS has continued to penalize insurance companies for failing to timely report certain insured vehicle information to the NY DMV •   DFS fined Allstate Insurance group $796,000; Farmers Insurance Group $764,000; Tokio Marine Insurance Group $720,000; and … Read more

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

by

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 FINES GEICO $910,000 FOR FAILING TO REPORT UNINSURED MOTORIST INFORMATION

by

According to the Consent Order’s allegations, and takeaways: •   NYS DMV’s Insurance Information & Enforcement System (“IIES”) enables law enforcement to know whether vehicles on the road lack insurance. •   As a public safety matter, injured motorists rely on the benefit of statutorily-required auto insurance. •   Insured vehicle information provided by insurers to DMV is used to identify, … Read more

SENATE PASSES BILL TO ENHANCE NYDFS ENFORCEMENT POWERS AGAINST UNLICENSED ACTIVITY

by

The New York State Senate passed legislation that will enhance NYDFS enforcement powers against unlicensed activity in the State.  Takeaways: •   While there has been some argument over the powers of NYDFS to go after unlicensed financial services activity in the state, new legislation passed by the Senate and pending in the Assembly clarifies that it … Read more

NYAG ISSUES $4.25 MILLION FINE IN CYBERSECURITY ACTION AGAINST LENDER ONEMAIN

by

NYDFS continues to roll out enforcement actions for cybersecurity lapses.  The latest is with lender OneMain.  According to NYDFS allegations in its Consent Order: •    This is the second cybersecurity enforcement action to arise from a routine examination, instead of a Cybersecurity Event. •    Meaning, as noted before, these enforcement actions are now routine. •    Third Party Risk … Read more