SB160: Bill Text

SB160,8,24 3. Processes for detecting, preventing, and responding to attacks, intrusions, and other system failures.

SB160,9,2 (3) Risk management. Based on the risk assessment under sub. (2), the licensee shall do all of the following:

SB160,9,6 (a) Design an information security program to mitigate the identified threats, commensurate with the size and complexity of the licensee, the nature and scope of the licensee's activities, including its use of 3rd-party service providers, and the sensitivity of the nonpublic information.

SB160,9,7 (b) Implement the following security measures, as appropriate:

SB160,9,8 1. Place access controls on information systems.

SB160,9,12 2. Identify and manage the data, personnel, devices, systems, and facilities that enable the licensee to achieve its business purposes, taking into consideration the relative importance of the data, personnel, devices, systems, and facilities to the business objectives and risk strategy of the licensee.

SB160,9,14 3. Restrict physical access to nonpublic information to authorized individuals only.

SB160,9,17 4. Protect, by encryption or other means, nonpublic information being transmitted over an external network and nonpublic information stored on a portable computer or storage device or media.

SB160,9,19 5. Adopt secure development practices for applications that are developed in-house and utilized by the licensee.

SB160,9,21 6. Modify information systems in accordance with the licensee's information security program.

SB160,9,23 7. Utilize effective controls, which may include multifactor authentication procedures for employees accessing nonpublic information.

SB160,9,25 8. Implement regular testing and monitoring of systems and procedures to detect actual and attempted attacks on, or intrusions into, an information system.

SB160,10,4 9. Include audit trails within the information security program that are designed to detect and respond to cybersecurity events and to reconstruct material financial transactions sufficient to support the normal operations and obligations of the licensee.

SB160,10,7 10. Implement measures to protect against the destruction, loss, or damage of nonpublic information due to environmental hazards, natural and other disasters, and technological failures.

SB160,10,9 11. Develop, implement, and maintain practices for the secure disposal of nonpublic information in all formats.

SB160,10,11 (c) Designate at least one employee, affiliate, or outside vendor as responsible for the information security program.

SB160,10,13 (d) Stay informed regarding emerging threats and vulnerabilities and implement safeguards to manage the threats and vulnerabilities.

SB160,10,15 (e) No less than annually, assess the effectiveness of security safeguards, including key controls, systems, and procedures.

SB160,10,17 (f) Include cybersecurity risks in the licensee's enterprise risk management process.

SB160,10,19 (g) Utilize reasonable security measures when sharing information, taking into consideration the character of the sharing and the type of information shared.

SB160,10,21 (h) Provide personnel with cybersecurity awareness training that is updated as necessary.

SB160,11,6 (4) Program adjustments. The licensee shall monitor, evaluate, and adjust the information security program under sub. (1) consistent with changes in technology, the sensitivity of the nonpublic information, internal and external threats to nonpublic information, and changes to the licensee's business operations, outsourcing arrangements, and information systems. If a licensee identifies areas, systems, or processes that require material improvement, updating, or redesign, the insurer shall document the identification and remedial efforts to address the areas, systems, or processes. The licensee shall maintain the documentation for a period of at least 5 years starting from the date the documentation was created and shall produce the documentation upon demand of the commissioner.

SB160,11,12 (5) Incident response plan. As part of its information security program, a licensee shall develop an incident response plan to promptly respond to, and recover from, a cybersecurity event that compromises the confidentiality, integrity, or availability of nonpublic information, the licensee's information systems, or the continuing functionality of any aspect of the licensee's business or operations. The incident response plan shall be in writing and address all of the following:

SB160,11,13 (a) The goals of the incident response plan.

SB160,11,14 (b) The internal process for responding to a cybersecurity event.

SB160,11,16 (c) The identification of clear roles, responsibilities, and levels of decision-making authority during and immediately following a cybersecurity event.

SB160,11,18 (d) The external and internal communications and information sharing during and immediately following a cybersecurity event.

SB160,11,20 (e) Requirements for the remediation of identified weaknesses in the information systems and associated controls.

SB160,11,22 (f) The reporting and documentation of a cybersecurity event and related incident response activities.

SB160,11,24 (g) The evaluation and revision of the incident response plan following a cybersecurity event.

SB160,12,5 (6) Oversight of 3rd-party service provider arrangements. No later than 2 years after the effective date of this subsection .... [LRB inserts date], a licensee shall exercise due diligence in selecting a 3rd-party service provider. The licensee shall make reasonable efforts to require a 3rd-party service provider to do all of the following:

SB160,12,8 (a) Implement appropriate administrative, technical, and physical measures to protect and secure the information systems and nonpublic information that are accessible to or held by the 3rd-party service provider.

SB160,12,9 (b) Report a cybersecurity event under s. 601.954.

SB160,12,12 (7) Oversight by board of directors. If a licensee has a board of directors, the board or an appropriate committee of the board shall, at a minimum, do all of the following:

SB160,12,14 (a) Require the licensee's executive management to develop, implement, and maintain the information security program under sub. (1).

SB160,12,16 (b) Oversee the development, implementation, and maintenance of the information security program.

SB160,12,18 (c) Require the licensee's executive management to report, at least annually, all of the following information to the board:

SB160,12,20 1. The overall status of the information security program and the licensee's compliance with this subchapter.

SB160,12,23 2. Material matters relating to the information security program, including issues relating to risk assessment, risk management and control decisions, 3rd-party service provider arrangements, and security testing.

SB160,12,24 3. Recommendations for modifications to the information security program.

SB160,13,7 (8) Annual certification to commissioner. Beginning in the year that is 2 years after the effective date of this subsection .... [LRB inserts date], a licensee who is domiciled in this state shall annually submit, no later than March 1, to the commissioner a written certification that the licensee is in compliance with the requirements of this section. The licensee shall maintain all records, schedules, and data supporting the certification for a period of at least 5 years and shall produce the records, schedules, and data upon demand of the commissioner.

SB160,13,9 (9) Exemptions. (a) This section does not apply to a licensee who meets any of the following criteria:

SB160,13,10 1. Has less than $10,000,000 in year-end total assets.

SB160,13,11 2. Has less than $5,000,000 in gross annual revenue.

SB160,13,13 3. Has fewer than 25 employees, including independent contractors, who work at least 30 hours a week for the licensee.

SB160,13,16 (b) The commissioner may issue an order to a licensee who is otherwise exempt under par. (a) to comply with this section if the commissioner determines that the order is warranted by the licensee's unique circumstances.

SB160,13,19 (c) A licensee who ceases to qualify for the exemption under par. (a) or who receives an order under par. (b) shall comply with this section no later than 180 days after the date the licensee ceases to qualify or receives the order.

SB160,6 Section 6. 601.953 of the statutes is created to read:

SB160,13,25 601.953 Investigation of cybersecurity event. (1) If a licensee learns that a cybersecurity event involving the licensee's information systems or nonpublic information has or may have occurred, the licensee, or an outside vendor or service provider designated to act on behalf of the licensee, shall conduct a prompt investigation that, at a minimum, includes all of the following:

SB160,14,1 (a) An assessment of the nature and scope of the cybersecurity event.

SB160,14,3 (b) The identification of any nonpublic information that was or may have been involved in the cybersecurity event.

SB160,14,6 (c) The performance of reasonable measures to restore the security of the licensee's information systems compromised in the cybersecurity event and prevent additional unauthorized acquisition, release, or use of nonpublic information.

SB160,14,11 (2) If a licensee knows that a cybersecurity event has or may have occurred in an information system maintained by a 3rd-party service provider, the licensee shall comply with sub. (1) or make reasonable efforts to confirm and document that the 3rd-party service provider has either complied with sub. (1) or failed to cooperate with the investigation under sub. (1).

SB160,14,14 (3) The licensee shall maintain records concerning a cybersecurity event for a period of at least 5 years starting from the date of the cybersecurity event and shall produce the records upon demand of the commissioner.

SB160,7 Section 7. 601.954 of the statutes is created to read:

SB160,14,19 601.954 Notification of a cybersecurity event. (1) Notification to the commissioner. (a) A licensee shall notify the commissioner that a cybersecurity event involving nonpublic information has occurred if any of the following conditions is met:

SB160,14,22 1. The licensee is domiciled in this state and the cybersecurity event has a reasonable likelihood of materially harming a consumer or a material part of the normal operations of the licensee.

SB160,14,25 2. The cybersecurity event is any of the following and the licensee reasonably believes that the cybersecurity event involves the nonpublic information of at least 250 consumers:

SB160,15,3 a. A cybersecurity event for which notice is required to be provided to a government body, self-regulatory agency, or other supervisory entity under state or federal law.

SB160,15,5 b. A cybersecurity event that has a reasonable likelihood of materially harming a consumer or a material part of the normal operations of the licensee.

SB160,15,9 (b) A licensee shall provide the notification under par. (a) in electronic form and as promptly as possible, but no later than 3 business days from the determination that the cybersecurity event occurred. In the notification, the licensee shall provide as much of the following information as possible:

SB160,15,11 1. The date and source of the cybersecurity event and the time period during which information systems were compromised by the cybersecurity event.

SB160,15,12 2. A description of how the cybersecurity event was discovered.

SB160,15,15 3. A description of how the nonpublic information was exposed, lost, stolen, or breached and an explanation of how the information has been, or is in the process of being, recovered.

SB160,15,18 4. A description of the specific data elements, including types of medical, financial, and personally identifiable information, that were acquired without authorization.

SB160,15,19 5. The number of consumers affected by the cybersecurity event.

SB160,15,21 6. A description of efforts to address the circumstances that allowed the cybersecurity event to occur.

SB160,15,23 7. The results of any internal review related to the cybersecurity event, including the identification of a lapse in automated controls or internal procedures.

SB160,16,3 8. Whether the licensee notified a government body, self-regulatory agency, or other supervisory entity of the cybersecurity event and, if applicable, the date the notification was provided.

SB160,16,6 9. A copy of the licensee's privacy policy and a statement outlining the steps the licensee will take, or has taken, to investigate and notify consumers affected by the cybersecurity event.

SB160,16,8 10. The name of a contact person who is familiar with the cybersecurity event and authorized to act for the licensee.

SB160,16,11 (c) The licensee shall update and supplement the information provided under par. (b) to address material changes to the information as additional information becomes available to the licensee.

SB160,16,21 (2) Notice to consumers and producers of record. A licensee required to notify the commissioner under sub. (1) shall comply with s. 134.98, if applicable, and provide to the commissioner a copy of any notice sent under s. 134.98 (2). If the licensee is an insurer whose services are accessed by consumers through an independent insurance producer, the licensee shall notify the producer of record of any consumers affected by the cybersecurity event no later than the date at which notice is provided under s. 134.98, except that notice is not required to a producer of record who is not authorized by law or contract to sell, solicit, or negotiate on behalf of the licensee or if the licensee does not have the current producer of record information for a consumer.

SB160,17,3 (3) Third-party service providers. If the licensee has knowledge of a cybersecurity event involving an information system maintained by a 3rd-party service provider, the licensee shall provide notice to the commissioner no later than 3 days after the earlier of the date the 3rd-party service provider notifies the licensee of the cybersecurity event or the licensee has actual knowledge of the cybersecurity event. The licensee is not required to comply with this subsection if the 3rd-party service provider provides notice under sub. (1).

SB160,17,14 (4) Reinsurers. In the event of a cybersecurity event involving nonpublic information, or involving an information system maintained by a 3rd-party service provider, a licensee who is acting as an assuming insurer and who does not have a direct contractual relationship with consumers affected by the cybersecurity event shall notify the ceding insurer and the commissioner of the licensee's state of domicile of the cybersecurity event no later than 3 business days after learning of the cybersecurity event. The licensee shall have no other notice obligations relating to a cybersecurity event or other data breach under this section or any other law of this state. A ceding insurer who has a direct contractual relationship with the affected consumers shall comply with the notification requirements under this section and, if applicable, the requirements under s. 134.98.

SB160,8 Section 8. 601.955 of the statutes is created to read:

SB160,17,19 601.955 Confidentiality. (1) All of the following apply to documents, materials, and other information in the possession or control of the commissioner that are obtained by, created by, or disclosed to the commissioner or any other person under this subchapter:

SB160,17,21 (a) The documents, materials, and other information are considered proprietary and contain trade secrets.

SB160,17,23 (b) The documents, materials, and other information are confidential and privileged, and the privilege may not be constructively waived.

SB160,17,25 (c) The documents, materials, and other information are not open to inspection or copying under s. 19.35 (1).

SB160,18,2 (d) The documents, materials, and other information are not subject to subpoena or discovery and are not admissible as evidence in a private civil action.

SB160,18,5 (e) The commissioner may use the documents, materials, and other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties.

SB160,18,7 (f) The commissioner may not make the documents, materials, or other information public without first obtaining written consent of the licensee.

SB160,18,10 (g) Neither the commissioner nor any person who received the documents, materials, or other information may testify or be required to testify in any private civil action regarding the documents, materials, or other information.

SB160,18,23 (2) Notwithstanding sub. (1), the commissioner may share, upon request, the documents, materials, or other information with other state, federal, and international financial regulatory agencies if the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other information and has verified that it has the legal authority to maintain confidentiality. The commissioner may receive documents, materials, or other information related to this subchapter from other state, federal, and international financial regulatory agencies and shall maintain as confidential or privileged any documents, materials, or other information that is treated as confidential or privileged under the laws of the jurisdiction that is the source of the documents, materials, or other information. The sharing of documents under this subsection does not constitute a delegation of regulatory authority and does not act as a waiver of privilege.

SB160,19,3 (3) Notwithstanding sub. (1), the commissioner may share the documents, materials, or other information under this section with a 3rd-party consultant or vendor if the consultant or vendor agrees in writing to maintain the confidentiality and privileged status of the documents, materials, and other information shared under this section.

SB160,19,7 (4) Nothing in this subchapter prohibits the commissioner from releasing final, adjudicated actions that are open to public inspection to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates, or subsidiaries.

SB160,9 Section 9. 601.956 of the statutes is created to read:

SB160,19,15 601.956 Enforcement. The commissioner shall have the power to examine and investigate the affairs of any licensee to determine whether the licensee has engaged in conduct in violation of this subchapter and to take action that is necessary or appropriate to enforce the provisions of this subchapter. This power is in addition to the powers that the commissioner has under subch. IV of this chapter. An investigation or examination under this section shall be conducted under subchs. IV and V of this chapter.