CHAPTER 146c. STANDARDS FOR SAFEGUARDING CUSTOMER INFORMATION
146c.3. Information security program.
146c.4. Objectives of information security program.
146c.5. Examples of methods of development and implementation.
146c.6. Assess risk.
146c.7. Manage and control risk.
146c.8. Oversee service provider arrangements.
146c.9. Adjust the program.
146c.10. Determined violation.
146c.11. Effective date.
The provisions of this Chapter 146c issued under sections 205, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. § § 66, 186, 411 and 412); section 648 of The Insurance Department Act of 1921 (40 P. S. § 288); and the Unfair Insurance Practices Act (40 P. S. § § 1171.11171.15), unless otherwise noted.
The provisions of this Chapter 146c adopted August 6, 2004, effective March 1, 2005, 34 Pa.B. 4146, unless otherwise noted.
§ 146c.1. Purpose.
This chapter establishes standards:
(1) For developing and implementing administrative, technical and physical safeguards to protect the security, confidentiality and integrity of customer information, under sections 501, 505(b) and 507 of the Gramm-Leach-Bliley Act (15 U.S.C.A. § § 6801, 6805(b) and 6807).
(2) For ensuring the security and confidentiality of customer records and information.
(3) To protect against any reasonably anticipated threats or hazards to the security or integrity of the records.
(4) To protect against unauthorized access to or use of records or information that could result in substantial harm or inconvenience to a customer.
§ 146c.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
ActThe Insurance Department Act of 1921 (40 P. S. § § 1321)
CustomerEither a customer as defined in § 146a.2 (relating to definitions) or a consumer as defined in § 146b.2 (relating to definitions).
Customer informationEither nonpublic personal financial information as defined in § 146a.2 or nonpublic personal health information as defined in § 146b.2 about a customer, whether in paper, electronic or other form that is maintained by or on behalf of the licensee.
Customer information systemsThe electronic or physical methods used to access, collect, store, use, transmit, protect or dispose of customer information.
DepartmentThe Insurance Department of the Commonwealth.
LicenseeAs defined in either § 146a.2 or § 146b.2, except that the term shall not include a purchasing group or a nonadmitted insurer in regard to the surplus lines business conducted pursuant to sections 16011625 of The Insurance Company Law of 1921 (40 P. S. § § 991.1601991.1625).
Service providerA person that maintains, processes or otherwise is permitted access to customer information through its provision of services directly to the licensee.
§ 146c.3. Information security program.
A licensee shall implement a comprehensive written information security program that includes administrative, technical and physical safeguards for the protection of customer information. The administrative, technical and physical safeguards included in the information security program shall be appropriate to the size and complexity of the licensee and the nature and scope of its activities.
§ 146c.4. Objectives of information security program.
A licensees information security program shall be designed to do the following:
(1) Safeguard the security and confidentiality of customer information.
(2) Protect against any reasonably anticipated threats or hazards to the security or integrity of the information.
(3) Protect against unauthorized access to or use of the information that could result in substantial harm or inconvenience to any customer.
§ 146c.5. Examples of methods of development and implementation.
The actions and procedures described in § § 146c.6146c.9 are examples of methods of implementation of the requirements of § § 146c.3 and 146c.4 (relating to information security program; and objectives of information security program). These examples are nonexclusive illustrations of actions and procedures that licensees may follow to implement § § 146c.3 and 146c.4.
§ 146c.6. Assess risk.
(1) Identifies reasonably foreseeable internal or external threats that could result in unauthorized disclosure, misuse, alteration or destruction of customer information or customer information systems.
(2) Assesses the likelihood and potential damage of these threats, taking into consideration the sensitivity of customer information.
(3) Assesses the sufficiency of policies, procedures, customer information systems and other safeguards in place to control risks.
§ 146c.7. Manage and control risk.
(1) Designs its information security program to control the identified risks, commensurate with the sensitivity of the information, as well as the complexity and scope of the licensees activities.
(2) Trains staff, as appropriate, to implement the licensees information security program.
(3) Regularly tests or otherwise regularly monitors the key controls, systems and procedures of the information security program. The frequency and nature of these tests or other monitoring practices are determined by the licensees risk assessment.
§ 146c.8. Oversee service provider arrangements.
(1) Exercises appropriate due diligence in selecting its service providers.
(2) Requires its service providers to implement appropriate measures designed to meet the objectives of this chapter, and, when indicated by the licensees risk assessment, takes appropriate steps to confirm that its service providers have satisfied these obligations.
§ 146c.9. Adjust the program.
The licensee monitors, evaluates and adjusts, as appropriate, the information security program in light of any relevant changes in technology, the sensitivity of its customer information, internal or external threats to information, and the licensees own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements and changes to customer information systems.
§ 146c.10. Determined violation.
(a) Violations of § § 146c.3 and 146c.4 (relating to information security program; and objectives of information security program) are deemed and defined by the Commissioner to be an unfair method of competition and an unfair or deceptive act or practice and shall be subject to any applicable penalties or remedies contained in the Unfair Insurance Practices Act (40 P. S. § § 1171.11171.15).
(b) A licensee has violated this chapter when the licensee knew or reasonably should have known of a pattern of activity or a practice of a service provider that constitutes either a violation of Chapter 146a (relating to privacy of consumer financial information), Chapter 146b (relating to privacy of consumer health information) or this chapter or a material breach of the contract or other arrangement between the licensee and the service provider, unless the licensee took reasonable steps to cure the breach or end the violation, as applicable, and, if the steps were unsuccessful, did the following:
(1) Terminated the contract or arrangement with the service provider, if feasible.
§ 146c.11. Effective date.
Each licensee shall establish and implement an information security program, including appropriate policies and systems under this chapter by March 1, 2005.
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