SB160-SSA1,1,4 1An Act to create 601.465 (3) (f), subchapter IX (title) of chapter 601 [precedes
2601.95], 601.95, 601.951, 601.952, 601.953, 601.954, 601.955 and 601.956 of the
3statutes; relating to: imposing requirements related to insurance data
4security and granting rule-making authority.

This bill imposes requirements relating to the protection of nonpublic
information on insurers and other persons regulated by the Office of the
Commissioner of Insurance (licensees). The bill defines “nonpublic information” to
mean nonpublic electronic information in the possession, custody, or control of a
licensee that is either information concerning a Wisconsin resident that can be used
to identify the individual in combination with another data element, such as a Social
Security number, or certain health-related information that can be used to identify
a Wisconsin resident.

Under the bill, a licensee must conduct a risk assessment and develop an
information security program based on the assessment. The risk assessment must
identify and assess reasonably foreseeable threats that could result in unauthorized
access to or transmission, disclosure, misuse, alteration, or destruction of nonpublic
information. The information security program must contain safeguards for the
protection of the licensee's information systems and nonpublic information and be

designed to mitigate threats, commensurate with the size and complexity of the
licensee, the nature and scope of the licensee's activities, and the sensitivity of the
nonpublic information. The bill requires the licensee to take specified risk mitigation
actions and to monitor, evaluate, and adjust the information security program as
appropriate.

The bill also requires that a licensee 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 the licensee's business or
operations. Under the bill, “cybersecurity event” generally means an event resulting
in the unauthorized access to, or disruption or misuse of, an information system or
nonpublic information stored on an information system.

The bill further requires that a licensee exercise due diligence in selecting
third-party service providers and make reasonable efforts to require that a service
provider implement measures to protect and secure information systems and
nonpublic information and report the occurrence of any cybersecurity event.

Under the bill, the above requirements do not apply to a licensee who has less
than $10 million in year-end total assets, less than $5 million in gross annual
revenue, or fewer than 50 full-time employees. A licensee who is not exempt from
the requirements must annually certify to the commissioner that the licensee has
complied with them.

Additionally, if a licensee knows that a cybersecurity event has or may have
occurred, the bill requires that the licensee conduct a prompt investigation to assess
the nature and scope of the event and take related actions, including the performance
of reasonable measures to restore the security of affected information systems. If the
cybersecurity event involves an information system maintained by a third-party
service provider, the licensee must comply with the investigation requirements or
make reasonable efforts to confirm that the service provider has either complied with
the requirements or failed to cooperate with the investigation.