This week, Rep. Ed Perlmutter (D-Colorado) introduced H.R. 6032, the “Data Breach Insurance Act,” which would provide a 15% tax credit on premium paid for businesses that purchase data breach insurance and comply with the National Institute of Standards and Technology (NIST) Cybersecurity Framework or similar security standards.
The legislation is meant to encourage businesses to adopt best practices for cybersecurity—such as the NIST framework—and to encourage development in the cyber insurance market.
“With the adoption of a cybersecurity framework preventing breaches on the front end and insurance to protect businesses on the back end, this legislation provides a two-pronged approach helping businesses take the necessary steps to address this growing threat,” Rep. Perlmutter said in a press release.
According to a report by Marsh, the standalone cyber insurance market has been growing at a rate between 21% and 32% annually since 2012. The report also notes that the overall capacity in the cyber insurance market “remains abundant.”
While the cyber insurance market is strong, the frequency and costs of cyberattacks are increasing. The average cost of a data breach is now $3.8 million, up from $3.5 million a year ago, according to data security research organization, Ponemon.
With the 114th Congress in its final weeks and the politics surrounding the upcoming elections swirling in the headlines, the bill probably won’t progress before the end of the year. However, similar legislation may be introduced in the future.
Jennifer Webb is Big “I” federal government affairs counsel.