§ 27-62-4 — Information Security Program

(a) Commensurate with the size and complexity of the licensee, the nature and scope of the activities of the licensee, including its use of third-party service providers, and the sensitivity of the nonpublic information used by the licensee or in the possession, custody, or control of the licensee, each licensee shall develop, implement, and maintain a comprehensive written information security program based on the risk assessment of the licensee that contains administrative, technical, and physical safeguards for the protection of nonpublic information and the information system of the licensee.
(b) The information security program of a licensee shall be designed to do all of the following:
(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.
(4) Define and periodically reevaluate a schedule for retention of nonpublic information and a mechanism for its destruction when no longer needed.
(c) The licensee shall do all of the following:
(1) Designate one or more employees, an affiliate, or an outside vendor to act on behalf of the licensee 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 threats to the security of information systems and nonpublic information that are accessible to or held by third-party service providers.
(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 operations of the licensee, including all of the following:
a. Employee training and management.
b. Information systems, including network and software design, as well as information classification, governance, processing, storage, transmission, and disposal.
c. Detecting, preventing, and responding to attacks, intrusions, or other systems failures.
(5) Implement information safeguards to manage the threats identified in its ongoing assessment, and no less than annually, assess the effectiveness of the key controls, systems, and procedures of the safeguards.
(d) Based on its risk assessment, the licensee shall do all of the following:
(1) Design its information security program to mitigate the identified risks commensurate with the size and complexity of the licensee, the nature and scope of the activities of the licensee, including the use by the licensee of third-party service providers, and the sensitivity of the nonpublic information used by the licensee or in the possession, custody, or control of the licensee.
(2) Determine which security measures listed in this subdivision are appropriate and, if appropriate, do the following to implement the security measures:
a. 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.
b. 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 risk strategy of the licensee.
c. Restrict physical access to nonpublic information to authorized individuals only.
d. Protect by encryption or other appropriate means, all nonpublic information while being transmitted over an external network and all nonpublic information stored on any laptop computer or other portable computing or storage device or media.
e. Adopt secure development practices for in-house developed applications utilized by the licensee.
f. Modify the information system in accordance with the information security program of the licensee.
g. Utilize effective controls, which may include multi-factor authentication procedures for employees accessing nonpublic information.
h. Regularly test and monitor systems and procedures to detect actual and attempted attacks on, or intrusions into, information systems.
i. 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 licensee.
j. 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.
k. Develop, implement, and maintain procedures for the secure disposal of nonpublic information in any format.
(3) Include cybersecurity risks in the enterprise risk management process of the licensee.
(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.
(5) Provide its personnel with cybersecurity awareness training that is updated as necessary to reflect risks identified by the licensee in the risk assessment.
(e) If the licensee has a board of directors, the board or an appropriate committee of the board, at a minimum, shall do all of the following:
(1) Require the executive management of the licensee or its delegates to develop, implement, and maintain the information security program of the licensee.
(2) Require the executive management of the licensee or its delegates to report in writing at least annually, all of the following:
a. The overall status of the information security program of the licensee and the compliance of the licensee with this chapter.
b. 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 the responses of management thereto, and recommendations for changes in the information security program.
(3) If executive management delegates any of its responsibilities under this section, it shall oversee the development, implementation, and maintenance of the information security program of the licensee prepared by the delegate and shall receive a report from the delegate complying with the requirements of the report to the board of directors.
(f)(1) A licensee shall exercise due diligence in selecting a third-party service provider.
(2) A licensee shall require 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) The licensee 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 changing business arrangements of the licensee, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements, and changes to information systems.
(h)(1) As part of its information security program, each licensee 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 information systems of the licensee, or the continuing functionality of any aspect of the business or operations of the licensee.
(2) The incident response plan shall address all of the following areas:
a. The internal process for responding to a cybersecurity event.
b. The goals of the incident response plan.
c. The definition of clear roles, responsibilities, and levels of decision-making authority.
d. External and internal communications and information sharing.
e. Identification of requirements for the remediation of any identified weaknesses in information systems and associated controls.
f. Documentation and reporting regarding cybersecurity events and related incident response activities.
g. The evaluation and revision as necessary of the incident response plan following a cybersecurity event.
(i) Each insurer domiciled in this state, annually on or before February 15, shall submit to the commissioner a written statement certifying that the insurer is in compliance with the requirements set forth in this chapter. Each insurer shall maintain for examination by the department all records, schedules, and data supporting this certificate for a period of five 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 the areas, systems, or processes. The documentation shall be available for inspection by the commissioner.
(j) Licensees shall have until May 1, 2021, to implement subsection (f) and until May 1, 2020, to implement the remainder of this section.

Legislative History

(Act 2019-98, §§4, 14.)