NYDFS Cybersecurity Regulation Compliance (23 NYCRR 500) for Licensed Firms
NYDFS cybersecurity regulation compliance used to mean filing a certification and hoping nobody looked. The 2023 amendment ended that. Part 500 now demands MFA for everyone, a maintained asset inventory, tighter privileged access, annual penetration testing and a certification signed by your top executive and your CISO. NetSys builds and runs those controls for licensed firms and keeps the records that make the signature safe to give.
The short answer
23 NYCRR Part 500 is the New York Department of Financial Services cybersecurity regulation. It applies to any person or company operating under a license, registration or charter from DFS under the Banking, Insurance or Financial Services Laws, which includes insurance agencies and brokers, mortgage lenders and brokers, money transmitters and state-chartered banks. It requires a cybersecurity program based on a risk assessment, written policies, a designated CISO, MFA, access controls, an asset inventory, monitoring, encryption, incident response and business continuity plans, penetration testing, training, and an annual certification of compliance filed with DFS. NetSys delivers NYDFS cybersecurity regulation compliance as a managed engagement: we implement and operate the technical controls, can serve as your designated CISO through vCISO, and maintain the evidence. Your executives sign the certification; we make sure it is true.
Most DFS licensees are small. A family insurance agency in Nassau County, a mortgage broker in Westchester, a title company in Brooklyn. Part 500 was written with banks in mind and then applied to all of them, with limited exemptions that still leave core requirements in place. The regulation is specific about controls in a way HIPAA and the SHIELD Act are not, which makes it easier to implement and harder to fake.
Our work for NYDFS cybersecurity regulation compliance follows the regulation's own section numbers. Each requirement becomes a control with a configuration, an owner and an artifact, so the annual certification is assembled from records rather than from memory. Where the regulation allows a limited exemption we help you document it with counsel rather than assume it applies.
Start With the Exposure DFS Would Find First
We begin with our free Tier 1 external penetration test, which covers the outside half of the regulation's testing requirement and shows what an attacker sees of your firm, or with a free assessment. Then we run the risk assessment the regulation requires, build the asset inventory, enforce MFA through Entra ID conditional access, bring privileged accounts under management, and configure monitoring and encryption. Policies are drafted for the CISO's approval. Internal penetration testing, vulnerability scanning and the annual certification package are scheduled on a calendar that matches DFS's cycle.
What Our NYDFS Cybersecurity Regulation Compliance Covers
Governance and the CISO Role
Someone qualified has to own the program and report on it.
- vCISO serving as your designated CISO, with a senior member of your firm overseeing
- Risk assessment and written cybersecurity policies approved by senior leadership
- Annual CISO report to the board or owners on the program's state
- Exemption analysis documented with counsel and filed where it applies
Access, MFA and Privileged Accounts
The 2023 amendment's sharpest requirements.
- MFA for every user on every system, including remote access and email
- Privileged accounts limited, reviewed periodically and managed through PAM
- Remote control protocols disabled or secured, and password policy enforced
- Access removed promptly when staff leave, with quarterly reviews on record
Inventory, Monitoring and Testing
Know every asset, watch every one, test the boundary.
- Asset inventory with owner, location, classification and support dates tracked
- Endpoint detection and response, log retention and alerting on suspicious activity
- Annual penetration testing inside and outside, plus scheduled vulnerability scans
- Encryption of nonpublic information in transit and at rest
Response, Continuity and Certification
Plans that are tested, and a filing you can stand behind.
- Incident response plan aligned to DFS notification duties, with counsel in the loop
- Business continuity and disaster recovery plans with tested backups
- Evidence organized by Part 500 section for the annual certification
- Remote delivery statewide; on-site in New York City, Long Island, Westchester and the Hudson Valley
Why Licensees Choose NetSys for NYDFS Cybersecurity Regulation Compliance
Let The Netsys Group assess and help you resolve your exposure. Call 845-203-3914 for your complimentary risk assessment consultation today!
- MFA, PAM, monitoring and disaster recovery are included in the managed agreement, not priced as extras
- A vCISO who can hold the designated role and present to your board
- Evidence tied to section numbers, so the certification is a lookup rather than a leap
- The free external penetration test covers the outside portion of the testing requirement on day one
- Month to month, with an office in Brooklyn and on-site coverage across the New York metro area
Where we deliver NYDFS 23 NYCRR 500 Compliance
NYDFS 23 NYCRR 500 Compliance in New York City · NYDFS 23 NYCRR 500 Compliance in Brooklyn, NY · NYDFS 23 NYCRR 500 Compliance in Westchester County · NYDFS 23 NYCRR 500 Compliance in Nassau County, NY · NYDFS 23 NYCRR 500 Compliance in Suffolk County, NY — and remotely wherever your systems run. See all locations and service areas.
NYDFS 23 NYCRR 500 Compliance FAQs
What is the NYDFS cybersecurity regulation?
23 NYCRR Part 500 is a rule from the New York Department of Financial Services that requires its licensees to run a documented cybersecurity program. It covers governance (a CISO, policies, board reporting), technical controls (MFA, access limits, encryption, monitoring, asset inventory), testing, training, vendor management, incident response, business continuity, notification to DFS after certain incidents, and an annual certification signed by senior leadership.
Who has to comply with 23 NYCRR 500?
Anyone operating under a DFS license, registration, charter or similar authorization: insurance agencies, brokers and adjusters, mortgage brokers and lenders, money transmitters, licensed lenders, and state-chartered banks and trust companies. Some smaller firms qualify for limited exemptions based on size, but an exemption must be filed, and it never removes every requirement.
How much does NYDFS cybersecurity regulation compliance cost?
The cost depends on how many of the required controls you already have, how many users and systems are in scope, and whether you need a vCISO. Most of the technical requirements are standard parts of a NetSys managed agreement, so licensees usually pay for the governance layer on top. We do not publish prices; the free assessment tells us what is missing.
Do we need a CISO if we are a small insurance agency?
The regulation requires every non-exempt covered entity to designate a qualified CISO, and it permits that person to be employed by a third-party service provider as long as the firm retains responsibility and a senior member oversees the arrangement. A vCISO from NetSys can fill the role for a small agency at a fraction of a full-time hire.
What changed in the 2023 amendment to Part 500?
The amendment extended MFA to every user on every information system, added a formal asset inventory requirement, tightened privileged access and password controls, required annual penetration testing and regular vulnerability scans, expanded incident notification duties including ransomware payments, and changed the annual certification so the highest-ranking executive and the CISO both sign. The phase-in periods DFS set for those provisions have run.
Can NetSys file our annual certification for us?
No. The certification is signed by your highest-ranking executive and your CISO. What we do is make it accurate: the controls are implemented and monitored, the evidence is organized by section, and any gaps are documented in a remediation plan so you can file an acknowledgment of noncompliance if that is the truthful choice. Legal questions about the filing go to counsel.
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