The cybersecurity regulations from the New York State Department of Financial Services (DFS) that went into effect on March 1, 2017 have had wide-reaching effects in the financial services industry and beyond. Their sweeping scope—applying to any person or entity licensed or otherwise operating under an authorization under the New York Banking, Insurance, or Financial Services Laws—brought thousands of entities into the DFS’ reach, many of which had had only tangential dealings with DFS in the past.

Case in point: higher education institutions that issue charitable annuities. These institutions are licensed under the New York Insurance law, but for many of them, it came as a surprise that DFS could possibly consider them to be a defined “Covered Entity” under the originally proposed regulations, which were amended and promulgated at 23 N.Y.C.R.R. Part 500. As part of those amendments, and in response to concern from higher education institutions and groups, DFS exempted issuers of charitable annuities from the scope of Part 500. See 23 N.Y.C.R.R. §500.19(f).

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