/assess

NYDFS Assessment

Evaluates organizational readiness for New York Department of Financial Services (NYDFS) 23 NYCRR 500 cybersecurity requirements.

Arguments

• $1 - Entity type (required: covered-entity, limited-exemption, full-scope)
• $2 - Assessment scope (optional: full, gap-analysis, annual-certification)

NYDFS 23 NYCRR 500 Overview

Effective Date: March 1, 2017 (with phased implementation through 2019) Amended: November 1, 2023 (significant updates) Applicability: Financial services institutions operating in New York State Annual Certification: Required by April 15th each year

Entity Types

Type	Description	Requirements	Exemptions
Covered Entity	<10 employees, <$5M revenue, <$10M assets	Full compliance	Limited exemptions available
Limited Exemption	Qualifies for certain exemptions	Reduced requirements	Must file exemption notice
Full Scope	Does not qualify for exemptions	All 23 sections apply	No exemptions

Covered Entities Under 23 NYCRR 500:

• Banks, trust companies, private bankers
• Insurance companies, agents, brokers
• Licensed lenders, mortgage companies
• Money transmitters
• Any entity operating under NY banking/insurance law

23 Sections of 23 NYCRR 500

Governance and Risk Management

500.02 - Cybersecurity Program

• Risk-based cybersecurity program required
• Written policies and procedures
• Annual risk assessment
• Protects confidentiality, integrity, availability

500.03 - Cybersecurity Policy

• Board-approved written policy
• Senior leadership oversight
• Addresses 9 required areas (encryption, MFA, monitoring, etc.)

500.04 - Chief Information Security Officer (CISO)

• Designated CISO required
• Can be employee, affiliate, third-party
• Reports to Board or senior officer
• Oversees cybersecurity program

500.09 - Risk Assessment

• Annual risk assessment required
• Documented methodology
• Identifies reasonably foreseeable threats
• Informs cybersecurity program design

Technical Controls

500.06 - Audit Trail

• Maintain audit logs
• Monitor authorized user activity
• Detect unauthorized access
• Reconstruct transactions

500.07 - Access Privileges

• Limit user access privileges
• Periodic review of access rights
• Disable/modify access promptly when access no longer required
• Annual recertification

500.11 - Multi-Factor Authentication (MFA)

• MFA required for:
  • Accessing internal networks from external networks
  • Privileged accounts
  • Accounts accessing nonpublic information
• Risk-based implementation acceptable

500.12 - Limitations on Data Retention

• Dispose of nonpublic information per schedule
• Disposition in accordance with policies
• Not retained longer than reasonably necessary

500.14 - Training and Monitoring

• Regular cybersecurity awareness training
• Personnel updates when needed
• Monitor activity to detect threats

500.15 - Encryption of Nonpublic Information

• Encryption in transit and at rest
• Risk-based approach acceptable
• If not encrypted, compensating controls required
• CISO-approved encryption standards

Incident Response and Business Continuity

500.16 - Incident Response Plan

• Written plan for cybersecurity events
• Include goals, procedures, roles
• Address internal processes, external communications
• Test annually

500.17 - Business Continuity and Disaster Recovery

• Written BC/DR plan
• Address data backup and recovery
• Response to disruption
• Test annually

500.19 - Notices to Superintendent

• Notify NYDFS within 72 hours of cybersecurity events
• Events affecting normal operations or nonpublic information
• Submit notice electronically

Third-Party Management

500.10 - Cybersecurity Personnel and Intelligence

• Qualified cybersecurity personnel
• Stay current on threats and countermeasures
• Threat intelligence updates

500.11 - Third-Party Service Provider Security Policy

• Written policy on third-party service providers
• Identify, assess, monitor risks
• Due diligence before engagement
• Contractual protections
• Annual review

Vulnerability Management

500.05 - Penetration Testing and Vulnerability Assessments

• Annual penetration testing
• Bi-annual vulnerability assessments
• Based on identified risks
• Conducted by qualified personnel
• Remediate critical vulnerabilities promptly

500.08 - Application Security

• Written procedures for secure application development
• Periodic assessment and testing
• Address secure coding practices

Additional Requirements

500.13 - Limitations on Wireless Access

• Authorize and monitor wireless access points
• Encryption for wireless networks
• Review periodically

500.18 - Material Changes

• Notify Superintendent of material changes to CISO designation
• 15 days advance notice

500.20 - Exemptions

• Limited exemptions available for small entities
• Must file notice with Superintendent
• Exemptions for: MFA, annual pen test, CISO, some policies

500.23 - Effective Dates

• Phased implementation (2017-2019)
• Amendment effective November 1, 2023
• Annual certification due by April 15

2023 Amendments (Key Changes)

Expanded Coverage:

• Applies to all entities operating under NY banking/insurance law
• Reduced exemption thresholds

Enhanced Requirements:

• Class A directors must oversee cybersecurity risk (banks)
• Privilege access management detailed
• Encryption requirements strengthened
• Incident response notification timeline to 72 hours
• Business continuity testing requirements
• Asset inventory and classification required

New Definitions:

• Affiliate, Authorized User, Privileged Account
• Senior Governing Body clarified

Assessment Output

1. Compliance Score: Overall readiness percentage across 23 sections
2. Section-by-Section Status:
   • Compliant: Meets requirements
   • Partial: Some controls in place
   • Non-Compliant: Significant gaps
   • Not Applicable: Exemption claimed
3. Critical Gaps:
   • CISO designation
   • Annual certification readiness
   • Penetration testing status
   • MFA deployment
   • Incident response notification process
   • Third-party risk management
4. Annual Certification Preparedness: Board certification due April 15
5. Remediation Roadmap: Prioritized action plan
6. Timeline to Compliance: Projected compliance date
7. Cost Estimate: Budget for remediation

Common Compliance Gaps

1. CISO Requirements (500.04):

   • No designated CISO
   • CISO not reporting to Board/senior leadership
   • Insufficient cybersecurity expertise

2. Annual Certification (500.17):

   • Late submission (past April 15 deadline)
   • Incomplete certification
   • Board not reviewing

3. Penetration Testing (500.05):

   • Not conducted annually
   • Not risk-based
   • Critical vulnerabilities not remediated

4. MFA (500.11):

   • Not implemented for all required access
   • Weak MFA (SMS-based)
   • Exemptions not documented

5. Incident Response (500.16, 500.19):

   • No written IR plan
   • Plan not tested
   • 72-hour notification process not established

6. Third-Party Risk (500.11):

   • No formal TPRM program
   • Vendor contracts lack cybersecurity requirements
   • No ongoing monitoring

7. Encryption (500.15):

   • Data at rest not encrypted
   • Compensating controls not documented
   • Encryption standards not CISO-approved

Annual Certification Process

Due Date: April 15 (for prior calendar year) Certifier: Board of Directors or Senior Officer Submission: Electronic via NYDFS portal Statement: Compliance with 23 NYCRR 500 Attachments: May include exemptions, explanations

Certification Statement Requires:

• Review of cybersecurity program
• Attestation of compliance (or explanation of non-compliance)
• Material changes since last certification
• Board/senior officer signature

Examples

# Full assessment for covered entity
/nydfs:assess covered-entity full

# Gap analysis for limited exemption entity
/nydfs:assess limited-exemption gap-analysis

# Annual certification readiness check
/nydfs:assess full-scope annual-certification

Key Resources

• 23 NYCRR 500: Full regulation text
• NYDFS Cybersecurity Resource Center: Guidance documents
• FAQ: NYDFS published FAQs on compliance
• Amendment Summary (2023): Key changes from November 2023 updates
• Superintendent's Reports: Annual cybersecurity industry reports