/certification

NYDFS Annual Certification

Comprehensive guidance for preparing and submitting the annual NYDFS 23 NYCRR 500 Certification of Compliance required by April 15th.

Arguments

• $1 - Certification year (optional: 2024, 2025, etc.)
• $2 - Preparation stage (optional: pre-assessment, board-preparation, submission-ready)

Regulatory Requirement

Section 500.17: Annual Certification of Compliance

• Due Date: April 15 each year
• Covers: Prior calendar year (Jan 1 - Dec 31)
• Certifier: Board of Directors or Senior Officer
• Submission: Electronic via NYDFS online portal
• Penalties: Non-compliance can result in enforcement action

Who Must Certify

Certifying Officer:

• Member of Board of Directors, OR
• Senior Officer (CEO, COO, CFO, CISO)
• Must have authority and knowledge
• Personal attestation required

Covered Entities:

• All entities subject to 23 NYCRR 500
• Banks, insurance companies, financial services firms
• Operating under NY Department of Financial Services authority

Exemptions:

• Entities qualifying for limited exemptions still must certify
• Must note exemptions in certification
• Cannot exempt from certification requirement itself

Certification Statement Components

1. Compliance Attestation

Affirm:

• Reviewed cybersecurity program
• Program complies with 23 NYCRR 500
• Reasonable assurance of security
• Controls appropriate to risk

Alternative (if not fully compliant):

• State areas of non-compliance
• Provide remediation plan
• Timeline for achieving compliance
• Compensating controls in place

2. Cybersecurity Program Review

Evidence of Review:

• Annual risk assessment conducted
• Policies and procedures reviewed
• Technical controls evaluated
• Third-party risks assessed
• Incidents reviewed
• Penetration testing completed
• Vulnerability assessments current

Board Oversight:

• CISO report to Board
• Cybersecurity program effectiveness
• Material cybersecurity events
• Budget and resources allocated

3. Material Changes

Report Changes:

• CISO designation changes (15-day notice required separately)
• Significant policy updates
• Major incidents or breaches
• Material system changes
• Third-party relationships
• Organizational restructuring affecting security

4. Exemptions Claimed

If Qualifying for Exemptions:

• List each exemption claimed (per 500.19)
• Justification for exemption
• Alternative controls implemented
• Small entity status confirmation

Common Exemptions (for qualified small entities):

• MFA requirement (500.12)
• Annual penetration testing (500.05)
• CISO designation (500.04)
• Certain policy requirements

Certification Preparation Process

Phase 1: Pre-Assessment (90 days before April 15)

January - Gap Analysis:

1. Review all 23 sections of 500
2. Document current compliance status
3. Identify gaps and deficiencies
4. Assess exemption eligibility
5. Prioritize remediation efforts

Key Questions:

• Is CISO designated and qualified?
• Was annual penetration test completed?
• Are vulnerability assessments current?
• Is MFA implemented for required access?
• Do we have incident response plan?
• Is third-party risk management program operational?
• Are audit logs maintained?
• Is encryption deployed per policy?

Phase 2: Remediation (60 days before)

February - Address Gaps:

1. Implement missing controls
2. Update policies and procedures
3. Complete required assessments
4. Conduct necessary testing
5. Document compensating controls
6. Prepare evidence packages

Focus Areas:

• Critical vulnerabilities from pen test
• MFA deployment completion
• IR plan testing
• Third-party vendor assessments
• Access recertification
• Training completion

Phase 3: Board Preparation (30 days before)

March - Executive Review:

1. Prepare Board presentation
2. CISO report on program status
3. Review certification statement
4. Discuss material events
5. Address non-compliance areas
6. Approve certification

Board Materials Should Include:

• Cybersecurity program overview
• Risk assessment summary
• Compliance status by section
• Incidents and response
• Third-party risk summary
• Budget and resource allocation
• Certification statement for approval
• Remediation plans for gaps

Phase 4: Submission (by April 15)

April 1-15 - File Certification:

1. Obtain Board/officer signature
2. Complete online portal form
3. Upload required documentation
4. Submit by April 15 deadline
5. Retain confirmation receipt
6. Document in compliance records

Certification Portal Submission

NYDFS Online Portal:

• Register entity if first-time filing
• Use secure login credentials
• Complete web-based form
• Upload supporting documents
• Electronic signature
• Confirmation email

Information Required:

• Entity legal name and NYDFS license number
• Certifying officer name and title
• Certification statement text
• Exemptions claimed (if any)
• Supporting documentation
• Contact information

Common Certification Pitfalls

1. Late Filing

Problem: Missing April 15 deadline Consequence: Regulatory enforcement, fines Solution: Calendar reminders, preparation timeline, early submission

2. Incomplete Certification

Problem: Missing required elements Consequence: Rejection, resubmission required Solution: Use checklist, review prior submissions, consult guidance

3. Unqualified Certifier

Problem: Certifier lacks authority or knowledge Consequence: Invalid certification Solution: Confirm Board member or senior officer, CISO involvement

4. Undocumented Exemptions

Problem: Claiming exemptions without proper justification Consequence: Exemptions denied, enforcement Solution: File exemption notices, document eligibility, implement alternatives

5. Material Omissions

Problem: Failing to disclose non-compliance or incidents Consequence: False certification, penalties Solution: Comprehensive review, legal counsel, transparency

6. Insufficient Board Oversight

Problem: Board not engaged in cybersecurity Consequence: Ineffective program, regulatory concern Solution: Regular Board reporting, CISO access, cybersecurity committee

Best Practices

Continuous Compliance

• Don't wait until March to assess compliance
• Ongoing monitoring throughout year
• Quarterly internal reviews
• Real-time remediation
• Regular Board updates

Documentation

• Maintain evidence files
• Track policy approvals
• Log security activities
• Retain test results
• Archive certifications

Internal Controls

• Assign certification coordinator
• Cross-functional review team
• Legal and compliance involvement
• External audit/validation
• Version control on policies

Board Engagement

• Quarterly cybersecurity updates
• Annual in-depth review
• Budget approval
• Incident notifications
• Strategic alignment

Certification Statement Template

Sample Certification Language:

"I, [Name], [Title] of [Covered Entity], certify that:

1. I have reviewed the cybersecurity program maintained by [Covered Entity] to protect the confidentiality, integrity, and availability of the entity's Information Systems;

2. The cybersecurity program has been designed to perform the following core cybersecurity functions: identify, protect, detect, respond, and recover;

3. The cybersecurity program is compliant with the requirements of 23 NYCRR 500 for the period January 1, [Year] through December 31, [Year];

4. [Covered Entity] has implemented a written cybersecurity policy that addresses:

   • Information security
   • Data governance and classification
   • Asset inventory and device management
   • Access controls and identity management
   • Business continuity and disaster recovery planning
   • Systems operations and availability concerns
   • Systems and network security
   • Systems and application development and quality assurance
   • Physical security and environmental controls
   • Customer data privacy
   • Vendor and third-party service provider management
   • Risk assessment
   • Incident response

5. [Any material changes to CISO designation or other material changes]

6. [Any exemptions claimed under 500.19]

Signature: _______________ Date: _______________"

Post-Certification Activities

After Submission:

• Retain confirmation receipt (7 years)
• File in corporate records
• Share with internal audit
• Update compliance calendar for next year
• Begin ongoing monitoring
• Address any findings from preparation

If NYDFS Follows Up:

• Respond promptly to inquiries
• Provide requested documentation
• Coordinate with legal counsel
• Cooperate with examinations
• Implement recommendations

Enforcement and Penalties

Potential Consequences of Non-Compliance:

• Civil monetary penalties
• Consent orders
• Enhanced monitoring
• License revocation (severe cases)
• Reputational damage
• Personal liability for certifiers

Recent Enforcement Actions:

• NYDFS has issued fines for late certifications
• Penalties for material misstatements
• Consent orders for program deficiencies
• Enhanced scrutiny for repeat violations

Examples

# Prepare for 2025 certification (covering 2024)
/nydfs:certification 2025 pre-assessment

# Board preparation stage for current year
/nydfs:certification 2025 board-preparation

# Final submission readiness check
/nydfs:certification 2025 submission-ready

Key Dates Calendar

Annual Certification Cycle:

• January 1-31: Gap assessment, remediation planning
• February 1-28: Remediation execution, testing
• March 1-31: Board preparation, review, approval
• April 1-15: Portal submission (DEADLINE: April 15)
• April-December: Continuous monitoring, next year preparation

Other Important Dates:

• 72 hours: Incident notification deadline (500.17)
• 15 days: CISO change notification (500.18)
• Ongoing: Third-party risk assessments, training, monitoring

Resources

• NYDFS Certification Portal: Online submission system
• 23 NYCRR 500.17: Certification regulation text
• NYDFS FAQs: Certification-specific guidance
• Sample Certifications: NYDFS published examples
• Compliance Checklist: Section-by-section review
• Industry Best Practices: Financial services cybersecurity standards