Quite a bit of this revolves around the front end underwriting whereas 
the insurer would certainly follow due diligence in covering themselves 
from those types of loopholes and the second half of that is the use of 
care, custody and control.  A legal precedent was set in a case about 4 
years ago now in which a simple contract doesn't constitute "care, 
custody and control" which is key in these discussions.  You might have, 
through a contract, care and control but not custody if you've parsed 
out that piece to a 3rd party vendor/provider.

Ken


On Tue, Dec 7, 2010 at 12:19 PM, Larry Medina wrote:

> I hope Ken is able to obtain a specimen of the form and can shed some 
> light
> on this.
>
> Similar to some of the thoughts of others, I see this as an intention 
> for a
> third party service provider to avoid compliance with a client firm's
> requirements for data they are in custodianship of.
>
> These are the types of issues typically addressed in a Contract T&C 
> outside
> of an SLA for normal operating issues, some of which are addressed in 
> a
> "Business Associates Agreement" where one exists.
>
> And, yes... these issues are less clearly defined in a 'cloud 
> environment',
> because in some cases, the firm you have a contract with may not be in
> custody of your data- it may have been parsed out to another firm 
> (unless
> your contract strictly prohibits this).
>
> Larry
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