The Illinois Office of the Special Deputy Receiver (OSD) was hit by a cyberattack last summer, resulting in millions of dollars in losses to two auto insurance agencies under liquidation, the Illinois Department of Insurance confirmed.
The cyber breach was first reported by the Chicago Tribune.
On July 15, 2021, the OSD learned of the loss of approximately $6.85 million resulting from wrongful transfer wires. The DOI said the criminal actor obtained funds from the accounts of Gateway Insurance Company and Affirmative Insurance Company which are under liquidation. To date, $2,870,500 has been recovered, which the Tribune reports belongs to the account of Affirmative.
Gateway sold commercial auto insurance and Affirmative sold personal auto insurance. Affirmative was ordered into liquidation in March 2016 and Gateway entered liquidation in July 2020, according to the OSD.
The OSD is a nonprofit formed in 1991 to administer the estates of insolvent or financially troubled Illinois insurance companies placed in judicially supervised receivership.
“The majority of policyholders’ claims are covered under the Illinois or other state guaranty funds and will therefore not be impacted,” the DOI said. “OSD has insurance for cyber fraud, and recovery efforts are ongoing.”
OSD reported the loss to law enforcement authorities and to its insurance carriers and an investigation is ongoing.
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