CyberInsurance

Context : OnInsurance

RobertXCringely on it

Here’s an interesting document from the White House outlining the advantages of what they are calling cyber insurance not just as a way to compensate people and businesses for their loss of data, but actually as an alternative to government regulation.

It’s important to understand that the larger thrust here is this alternative to regulation. Actual insurance is secondary to behavior modification.

The idea is that all the government has to do is require that organizations get cyber insurance, then rely on the insurance companies to regulate customer behavior or those customers risk being cancelled. If interests are properly aligned this process can work quite efficiently, they argue.

With the U.S. government in a state of political paralysis, I can easily see something like this happening. Since the cyber insurance proposal is coming from the White House while being ruthlessly pro-business, it is likely to get broad bipartisan support.

But we all have to understand that this proposal would take something we’ve been thinking of as a law enforcement or even national security function and make it into a financial service.

Remember those banks that were too big to fail? Now we are going to rely on them to protect our data while at the same time guaranteeing them a profit for doing so.

Am I the only one who finds this unnerving?