diff --git a/pkg/ccm/loadbalancer.go b/pkg/ccm/loadbalancer.go
index 35df7e90..8605c88b 100644
--- a/pkg/ccm/loadbalancer.go
+++ b/pkg/ccm/loadbalancer.go
@@ -146,16 +146,17 @@ func (l *LoadBalancer) EnsureLoadBalancer( //nolint:gocyclo // not really comple
 		spec.Version = lb.Version
 		spec.Name = &name
 		updatePayload := &loadbalancer.UpdateLoadBalancerPayload{
-			ExternalAddress: spec.ExternalAddress,
-			Listeners:       spec.Listeners,
-			Name:            spec.Name,
-			Networks:        spec.Networks,
-			Options:         spec.Options,
-			PlanId:          spec.PlanId,
-			Region:          spec.Region,
-			Labels:          spec.Labels,
-			TargetPools:     spec.TargetPools,
-			Version:         spec.Version,
+			ExternalAddress:                      spec.ExternalAddress,
+			Listeners:                            spec.Listeners,
+			Name:                                 spec.Name,
+			Networks:                             spec.Networks,
+			Options:                              spec.Options,
+			PlanId:                               spec.PlanId,
+			Region:                               spec.Region,
+			Labels:                               spec.Labels,
+			TargetPools:                          spec.TargetPools,
+			DisableTargetSecurityGroupAssignment: lb.DisableTargetSecurityGroupAssignment,
+			Version:                              spec.Version,
 		}
 		lb, err = l.client.UpdateLoadBalancer(ctx, name, updatePayload)
 		if err != nil {
@@ -298,10 +299,11 @@ func (l *LoadBalancer) EnsureLoadBalancerDeleted(
 				Observability:      nil,
 				PrivateNetworkOnly: lb.Options.PrivateNetworkOnly,
 			},
-			TargetPools: lb.TargetPools,
-			Version:     lb.Version,
-			PlanId:      lb.PlanId,
-			Labels:      lb.Labels,
+			TargetPools:                          lb.TargetPools,
+			DisableTargetSecurityGroupAssignment: lb.DisableTargetSecurityGroupAssignment,
+			Version:                              lb.Version,
+			PlanId:                               lb.PlanId,
+			Labels:                               lb.Labels,
 		}
 		_, err = l.client.UpdateLoadBalancer(ctx, name, payload)
 		if err != nil {
diff --git a/pkg/ccm/loadbalancer_spec.go b/pkg/ccm/loadbalancer_spec.go
index e88ff129..d18ca712 100644
--- a/pkg/ccm/loadbalancer_spec.go
+++ b/pkg/ccm/loadbalancer_spec.go
@@ -294,6 +294,11 @@ func lbSpecFromService(
 		lb.Labels = new(opts.ExtraLabels)
 	}
 
+	// For new lb's always set DisableTargetSecurityGroupAssignment to true
+	// This function is also used by the LB UPDATE call, but for UPDATE we just
+	// use the value from the already created lb instead of this one.
+	lb.DisableTargetSecurityGroupAssignment = new(true)
+
 	// Add metric metricsRemoteWrite settings
 	lb.Options.Observability = observability
 
diff --git a/pkg/ccm/loadbalancer_test.go b/pkg/ccm/loadbalancer_test.go
index e9cb66ad..b741ddf5 100644
--- a/pkg/ccm/loadbalancer_test.go
+++ b/pkg/ccm/loadbalancer_test.go
@@ -212,7 +212,8 @@ var _ = Describe("LoadBalancer", func() {
 						},
 					}, nil
 				})
-			mockClient.EXPECT().CreateLoadBalancer(gomock.Any(), gomock.Any()).MinTimes(1).Return(&loadbalancer.LoadBalancer{}, nil)
+			// isCreatedWithEnabledDisableTargetSecurityGroupAssignment ensures that DisableTargetSecurityGroupAssignment is set to true
+			mockClient.EXPECT().CreateLoadBalancer(gomock.Any(), isCreatedWithEnabledDisableTargetSecurityGroupAssignment()).MinTimes(1).Return(&loadbalancer.LoadBalancer{}, nil)
 
 			_, err := lbInModeIgnoreAndObs.EnsureLoadBalancer(context.Background(), clusterName, minimalLoadBalancerService(), []*corev1.Node{})
 			Expect(err).To(MatchError(notYetReadyError))
@@ -220,6 +221,57 @@ var _ = Describe("LoadBalancer", func() {
 			// Expected CreateLoadBalancer to have been called.
 		})
 
+		DescribeTable("LoadBalancer UPDATE behavior for DisableTargetSecurityGroupAssignment",
+			func(disableTargetSG bool, matcher gomock.Matcher) {
+				svc := minimalLoadBalancerService()
+				spec, _, err := lbSpecFromService(svc, []*corev1.Node{}, lbOpts, nil)
+				Expect(err).NotTo(HaveOccurred())
+
+				myLb := &loadbalancer.LoadBalancer{
+					Errors:                               []loadbalancer.LoadBalancerError{},
+					ExternalAddress:                      spec.ExternalAddress,
+					Listeners:                            spec.Listeners,
+					Name:                                 spec.Name,
+					Networks:                             spec.Networks,
+					Options:                              spec.Options,
+					PrivateAddress:                       spec.PrivateAddress,
+					Status:                               new(loadbalancer.LOADBALANCERSTATUS_STATUS_READY),
+					TargetPools:                          spec.TargetPools,
+					DisableTargetSecurityGroupAssignment: &disableTargetSG,
+					Version:                              new("current-version"),
+					PlanId:                               new(p10),
+				}
+
+				mockClient.EXPECT().GetLoadBalancer(gomock.Any(), gomock.Any()).Return(myLb, nil)
+
+				mockClient.EXPECT().UpdateLoadBalancer(
+					gomock.Any(),
+					loadBalancer.GetLoadBalancerName(context.Background(), clusterName, svc),
+					matcher,
+				).MinTimes(1).Return(myLb, nil)
+
+				// Trigger an update by changing the service
+				svc = svc.DeepCopy()
+				svc.Spec.Ports = append(svc.Spec.Ports, corev1.ServicePort{
+					Name:     "a-port",
+					Protocol: corev1.ProtocolTCP,
+					Port:     80,
+					NodePort: 1234,
+				})
+
+				_, err = loadBalancer.EnsureLoadBalancer(context.Background(), clusterName, svc, []*corev1.Node{})
+				Expect(err).NotTo(HaveOccurred())
+			},
+			Entry("should not set DisableTargetSecurityGroupAssignment to true when it is initially false",
+				false,
+				hasNotEnabledDisableTargetSecurityGroupAssignment(),
+			),
+			Entry("should keep DisableTargetSecurityGroupAssignment as true when it is initially true",
+				true,
+				hasEnabledDisableTargetSecurityGroupAssignment(),
+			),
+		)
+
 		It("should update observability credential if credentials are specified in load balancer", func() {
 			svc := minimalLoadBalancerService()
 			spec, _, err := lbSpecFromService(svc, []*corev1.Node{}, lbOpts, &loadbalancer.LoadbalancerOptionObservability{
@@ -715,6 +767,33 @@ func hasNoObservabilityConfigured() gomock.Matcher {
 	})
 }
 
+// hasNotEnabledDisableTargetSecurityGroupAssignment ensures that the given UpdateLoadBalancerPayload
+// has not set DisableTargetSecurityGroupAssignment to true.
+func hasNotEnabledDisableTargetSecurityGroupAssignment() gomock.Matcher {
+	return gomock.Cond(func(x any) bool {
+		lb := x.(*loadbalancer.UpdateLoadBalancerPayload)
+		return lb.DisableTargetSecurityGroupAssignment != nil && *lb.DisableTargetSecurityGroupAssignment != true
+	})
+}
+
+// hasEnabledDisableTargetSecurityGroupAssignment ensures that the given UpdateLoadBalancerPayload
+// has set DisableTargetSecurityGroupAssignment to true.
+func hasEnabledDisableTargetSecurityGroupAssignment() gomock.Matcher {
+	return gomock.Cond(func(x any) bool {
+		lb := x.(*loadbalancer.UpdateLoadBalancerPayload)
+		return lb.DisableTargetSecurityGroupAssignment != nil && *lb.DisableTargetSecurityGroupAssignment == true
+	})
+}
+
+// isCreatedWithEnabledDisableTargetSecurityGroupAssignment ensures that new lbs are always created
+// with DisableTargetSecurityGroupAssignment set to true.
+func isCreatedWithEnabledDisableTargetSecurityGroupAssignment() gomock.Matcher {
+	return gomock.Cond(func(x any) bool {
+		lb := x.(*loadbalancer.CreateLoadBalancerPayload)
+		return lb.DisableTargetSecurityGroupAssignment != nil && *lb.DisableTargetSecurityGroupAssignment == true
+	})
+}
+
 // externalAddressSet ensures that the given UpdateLoadBalancerPayload has external address set to address.
 func externalAddressSet(address string) gomock.Matcher {
 	return gomock.Cond(func(x any) bool {