Cybersecurity For Insurance Carriers: Evolving State Guidelines and Third-Party Vendor Relationships

Cybersecurity expectations are shifting fast—driven by rapid advancements in areas such as artificial intelligence, identity verification, biometric authentication and fraud prevention. As insurers integrate technology into their standard business workflows, regulators are increasingly focused on how carriers and their third-party partners manage data. Several states have begun implementing new cybersecurity requirements, signaling a shift that can influence broader industry practices across insurance, finance and other business services. For insurance carriers, this stresses the importance of partnering with third-party vendors who maintain robust data security practices while delivering a positive customer-centric experience.

The Growing Role of Third-party Vendors in Cybersecurity Regulations

Third-party platforms deliver essential capabilities, but their role in data handling makes them an integral part of an organization’s security posture. As threat actors refine their fraud tactics, stakeholders are closely examining how external vendors safeguard information. With 76% of CISOs concerned about the risk of a material cyberattack within a year, selecting the right partners is critical. Organizations are increasingly looking for partners who demonstrate enterprise-grade protections for consumer data and take into consideration future governmental guidance. As digital interactions grow more complex and threat tactics evolve, regulators and stakeholders not only want to learn more about what third-party vendors do, but also the “how” behind operational protections. This shift reflects a movement toward transparency and continuous oversight—an approach our team has long championed to ensure security is treated as an ongoing responsibility rather than a one-time review.

The pressure is rising as fraudsters increasingly look to exploit gaps in identity and fraud defenses. As organizations master digital onboarding, attackers craft synthetic identities. As call centers become more convenient, fraudsters exploit ported phones and spoofed numbers. As insurance carriers adopt artificial intelligence (AI) to improve efficiency, bad actors tap generative artificial intelligence (gen AI) to mimic documents, voices and behaviors with alarming precision. Cybercriminals weaponize stolen information to fuel attacks across industries, making it critical to ensure that third-party partners take security as seriously as the organization itself.

The Power of Multi-Layered Defenses

No single tool or method can address every type of fraud risk; it’s important to explore multi-layered approaches that combine identity verification, fraud prevention, behavioral insights and continuous monitoring. These strategies are not designed to offer 100% guarantees because threat actors are ingenious with inventing new ways to deceive corporations and people. Instead, these strategies help organizations stay flexible, maintain operational stability and respond more effectively as fraud patterns change, and regulatory expectations evolve.

LexisNexis® Risk Solutions regularly evaluates its security protocols and invests in technology that meets evolving standards. We are absolutely dedicated to maintaining trust with our clients and their customers, as well as supporting your organization's operational resilience.

Building a Resilient Partnership

Creating a partnership with your third-party vendor and your organization will help support regulatory adherence as each state updates its guidance. Business disruption is no longer a hypothetical risk. Cyberattacks are driving data exposure, breaches and costly legal challenges across the insurance ecosystem. To stay resilient, carriers must strengthen their defenses and proactively close security gaps with multi-layered fraud mitigation solutions.

The cybersecurity landscape will continue to evolve—fraud tactics will shift, regulations will advance and the challenges of protecting sensitive information will never stand still. By partnering with external vendors who are committed to transparency and strengthening layered defenses, organizations can not only remain resilient but also help create a safer, more trusted future for the customers they serve.