Title 27
Insurance

Chapter 1
Domestic Insurance Companies

§ 27-1-46. Information security program. [Effective January 1, 2025.]

(a) Commensurate with the size and complexity of an insurer, the nature and scope of an insurer’s activities, including its use of third-party service providers, and the sensitivity of the nonpublic information used by the insurer or in the insurer’s possession, custody, or control, each domestic insurance company shall develop, implement, and maintain a comprehensive written information security program, based on the insurer’s risk assessment and that contains administrative, technical, and physical safeguards for the protection of nonpublic information and the insurer’s information system. For purposes of this chapter, “information security program” means the administrative, technical, and physical safeguards that an insurer uses to access, collect, distribute, process, protect, store, use, transmit, dispose of, or otherwise handle, nonpublic information. “Publicly available information” means any information that a licensee has a reasonable basis to believe is lawfully made available to the general public from: federal, state, or local government records; widely distributed media; or disclosures to the general public that are required to be made by federal, state, or local law. “Nonpublic information” means information that is not publicly available information and is:

(1) Business-related information of a licensee, the tampering with which, or unauthorized disclosure, access, or use of which, would cause a material adverse impact to the business, operations, or security of the licensee;

(2) Any information concerning a consumer which, because of name, number, personal mark, or other identifier, can be used to identify such consumer, in combination with any one or more of the following data elements:

(i) Social security number;

(ii) Driver’s license number or non-driver identification card number;

(iii) Account number, credit, or debit card number;

(iv) Any security code, access code, or password that would permit access to a consumer’s financial account; or

(v) Biometric records;

(3) Any information or data, except age or gender, in any form or medium created by or derived from a healthcare provider or a consumer and that relates to:

(i) The past, present, or future physical, mental, behavioral health, or medical condition of any consumer or a member of the consumer’s family;

(ii) The provision of health care to any consumer; or

(iii) Payment for the provision of health care to any consumer.

(b) Objectives of information security program. An insurer’s information security program shall be designed to:

(1) Protect the security and confidentiality of nonpublic information and the security of the information system;

(2) Protect against any threats or hazards to the security or integrity of nonpublic information and the information system;

(3) Protect against unauthorized access to or use of nonpublic information, and minimize the likelihood of harm to any consumer. For purposes of this section, “consumer” means an individual, including, but not limited to, applicants, policyholders, insureds, beneficiaries, claimants, and certificate holders, who is a resident of this state and whose nonpublic information is in an insurer’s possession, custody, or control; and

(4) Define and periodically reevaluate a schedule for retention of nonpublic information and a mechanism for its destruction when no longer needed.

(c) Risk assessment. The insurer shall:

(1) Designate one or more employees, an affiliate, or an outside vendor designated to act on behalf of the insurer who is responsible for the information security program;

(2) Identify reasonably foreseeable internal or external threats that could result in unauthorized access, transmission, disclosure, misuse, alteration, or destruction of nonpublic information, including the security of information systems and nonpublic information that are accessible to, or held by, third-party service providers. “Third-party service providers” means a person, not otherwise defined as a licensee, that contracts with a licensee to maintain, process, store, or otherwise is permitted access to nonpublic information through its provision of services to the licensee. Third-party service providers does not include licensed insurance producers;

(3) Assess the likelihood and potential damage of these threats, taking into consideration the sensitivity of the nonpublic information;

(4) Assess the sufficiency of policies, procedures, information systems, and other safeguards in place to manage these threats, including consideration of threats in each relevant area of the insurer’s operations, including:

(i) Employee training and management;

(ii) Information systems, including network and software design, as well as information classification, governance, processing, storage, transmission, and disposal; and

(iii) Detecting, preventing, and responding to attacks, intrusions, or other systems failures; and

(5) Implement information safeguards to manage the threats identified in its ongoing assessment, and no less than annually, assess the effectiveness of the safeguards’ key controls, systems, and procedures.

(d) Risk management. Based on its risk assessment, the insurer shall:

(1) Design its information security program to mitigate the identified risks, commensurate with the size and complexity of the insurer’s activities, including its use of third-party service providers, and the sensitivity of the nonpublic information used by the insurer or in the insurer’s possession, custody, or control;

(2) Determine which security measures listed below are appropriate and implement such security measures:

(i) Place access controls on information systems, including controls to authenticate and permit access only to authorized individuals to protect against the unauthorized acquisition of nonpublic information. “Authorized individual” means an individual known to and screened by the insurer, and determined to be necessary and appropriate to have access to the nonpublic information held by the insurer, and the insurer’s information systems;

(ii) Identify and manage the data, personnel, devices, systems, and facilities that enable the organization to achieve business purposes in accordance with their relative importance to business objectives and the organization’s risk strategy;

(iii) Restrict access at physical locations containing nonpublic information only to authorized individuals;

(iv) Protect, by encryption or other appropriate means, all nonpublic information while being transmitted over an external network and all nonpublic information stored on a laptop computer or other portable computing or storage device or media;

(v) Adopt secure development practices for in-house developed applications utilized by the insurer and procedures for evaluating, assessing, or testing the security of externally developed applications utilized by the insurer;

(vi) Modify the information system in accordance with the insurer’s information security program;

(vii) Utilize effective controls, which may include multi-factor authentication procedures for any individual accessing nonpublic information;

(viii) Regularly test and monitor systems and procedures to detect actual and attempted attacks on, or intrusions into, information systems;

(ix) Include audit trails within the information security program designed to detect and respond to cybersecurity events and designed to reconstruct material financial transactions sufficient to support normal operations and obligations of the insurer;

(x) Implement measures to protect against destruction, loss, or damage of nonpublic information due to environmental hazards, such as fire and water damage or other catastrophes or technological failures; and

(xi) Develop, implement, and maintain procedures for the secure disposal of nonpublic information in any format;

(3) Include cybersecurity risks in the insurer’s enterprise risk management process;

(4) Stay informed regarding emerging threats or vulnerabilities and utilize reasonable security measures when sharing information relative to the character of the sharing and the type of information shared; and

(5) Provide its personnel with cybersecurity awareness training that is updated as necessary to reflect risks identified by the insurer in the risk assessment.

(e) Oversight by board of directors. If the insurer has a board of directors, the board or an appropriate committee of the board shall, at a minimum:

(1) Require the insurer’s executive management or its designees to develop, implement, and maintain the insurer’s information security program;

(2) Require the insurer’s executive management or its designees to report in writing at least annually, the following information:

(i) The overall status of the information security program and the insurer’s compliance with this chapter; and

(ii) Material matters related to the information security program, addressing issues such as risk assessment, risk management and control decisions, third-party service provider arrangements, results of testing, cybersecurity events or violations and management’s responses thereto, or recommendations for changes in the information security program; and

(3) If executive management delegates any of its responsibilities pursuant to this section, it shall oversee the development, implementation, and maintenance of the insurer’s information security program prepared by the designee(s) and shall receive a report from the designee(s) complying with the requirements of the report to the board of directors.

(f) Oversight of third-party service provider arrangements.

(1) An insurer shall exercise due diligence in selecting its third-party service provider; and

(2) An insurer shall take reasonable steps to request a third-party service provider to 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 third-party service provider.

(g) Program adjustments. The insurer shall monitor, evaluate, and adjust, as appropriate, the information security program consistent with any relevant changes in technology, the sensitivity of its nonpublic information, internal or external threats to information, and the insurer’s own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements, and changes to information systems.

(h) Incident response plan.

(1) As part of its information security program, each insurer shall establish a written incident response plan designed to promptly respond to, and recover from, any cybersecurity event that compromises the confidentiality, integrity, or availability of nonpublic information in its possession, the insurer’s information systems, or the continuing functionality of any aspect of the insurer’s business or operations.

(2) Such incident response plan shall address the following areas:

(i) The internal process for responding to a cybersecurity event;

(ii) The goals of the incident response plan;

(iii) The definition of clear roles, responsibilities, and levels of decision-making authority;

(iv) External and internal communications and information sharing;

(v) Identification of requirements for the remediation of any identified weaknesses in information systems and associated controls;

(vi) Documentation and reporting regarding cybersecurity events and related incident response activities; and

(vii) The evaluation and revision as necessary of the incident response plan following a cybersecurity event.

(3) If the insurer learns that a cybersecurity event has or may have occurred, the insurer, or an outside vendor and/or service provider designated to act on behalf of the insurer, shall conduct a prompt investigation. For purposes of this section, “cybersecurity event” means an event resulting in unauthorized access to, disruption or misuse of an information system or nonpublic information stored on such information system. This does not include the unauthorized acquisition of encrypted nonpublic information if the encryption, process, or key is not also acquired, released, or used without authorization. This also does not include an event with regard to which the insurer has determined that the nonpublic information accessed by an unauthorized person has not been used or released and has been returned or destroyed.

(i) During the investigation, the insurer, or an outside vendor and/or service provider designated to act on behalf of the insurer, shall, at a minimum, determine as much of the following information as possible:

(A) Whether a cybersecurity event has occurred;

(B) Assess the nature and scope of the cybersecurity event;

(C) Identify any nonpublic information that may have been involved in the cybersecurity event; and

(D) Perform or oversee reasonable measures to restore the security of the information systems compromised in the cybersecurity event in order to prevent further unauthorized acquisition, release, or use of nonpublic information in the insurer’s possession, custody, or control.

(ii) If the insurer learns that a cybersecurity event has or may have occurred in a system maintained by a third-party service provider, and it has or may have impacted the insurer’s nonpublic information, the insurer shall make reasonable efforts to complete the steps set forth in subsection (a) of this section or make reasonable efforts to confirm and document that the third-party service provider has completed those steps.

(iii) The insurer shall maintain records concerning all cybersecurity events for a period of at least five (5) years from the date of the cybersecurity event. The insurer shall produce those records upon demand of the commissioner pursuant to chapter 13.1 of this title or other statutory authority.

(i) Annually, each insurer domiciled in this state shall submit to the commissioner a written statement by April 15 certifying that the insurer is in compliance with the requirements set forth in this section. Each insurer shall maintain for examination by the department all records, schedules, and data supporting this certificate for a period of five (5) years. To the extent an insurer has identified areas, systems, or processes that require material improvement, updating, or redesign, the insurer shall document the identification and the remedial efforts planned and underway to address such areas, systems, or processes. This documentation must be available for inspection by the commissioner pursuant to a request under chapter 13.1 of this title or other statutory authority.

(j) If an insurer domiciled in this state has an information security program that is prepared for and in compliance with Pub. L. No. 104-191, 110 Stat. 1936, enacted August 21, 1996 (Health Insurance Portability and Accountability Act) and related privacy, security, and breach notification regulations pursuant to Code of Federal Regulations, Parts 160 and 164, and Pub. L. No. 111-5, 123 Stat. 226, enacted February 17, 2009 (Health Information Technology), insurers can rely on that plan to certify their compliance with subsection (i) of this section.