Oklahoma law defines cybersecurity insurance for data breach claims under HB1160

House Bill 1160 is making waves in the Oklahoma State Legislature as it seeks to redefine the landscape of insurance claims related to insolvent insurers and cybersecurity coverage. Introduced on February 25, 2025, this bill aims to streamline the claims process for policyholders affected by the liquidation of insurance companies, while also expanding the definition of cybersecurity insurance.

At the heart of HB1160 is a provision that allows claims to be filed with the association either by the final court date for claims against a liquidator or up to 18 months after the liquidation order. This change is significant as it provides a clearer timeline for policyholders, ensuring they have ample opportunity to seek compensation without being hindered by complex legal timelines. However, the bill explicitly excludes workers' compensation claims, which has sparked some debate among lawmakers and stakeholders.

The bill also broadens the scope of what constitutes cybersecurity insurance, encompassing first-party and third-party coverage for a range of cyber threats, including data breaches, ransomware, and identity theft. This expansion reflects the growing recognition of the importance of cybersecurity in today's digital landscape, as businesses and individuals alike face increasing risks from cyberattacks.

While proponents argue that HB1160 will enhance consumer protection and adapt to the evolving insurance market, critics have raised concerns about the potential implications for insurers and the overall stability of the insurance industry in Oklahoma. Some fear that the expanded definitions and claims timelines could lead to increased costs for insurers, which may ultimately be passed on to consumers.

As the bill moves through the legislative process, its implications for both policyholders and the insurance industry will be closely monitored. If passed, HB1160 could set a precedent for how insurance claims are handled in the face of insolvency and cyber threats, marking a significant shift in Oklahoma's insurance landscape. The next steps will involve further discussions and potential amendments as lawmakers weigh the benefits and drawbacks of this ambitious legislation.