The benefits of using Unmanned Aircraft Systems (UAS) for tasks from catastrophe response to infrastructure inspection to construction site monitoring, and everything in between, are great. ...19 May 2016
Massachusetts Regulations May Herald New Era for Information Security
A new era of information security law may well start as the Standards for the Protection of Personal Information of Residents of the Commonwealth of Massachusetts, 201 CMR 17.00 (“Massachusetts Standards”) go into effect today, March 1, 2010. All institutions collecting sensitive personal information (e.g., a name combined with a Social Security Number, state-issued identification number, or financial account number) from Massachusetts residents should pay careful attention to the requirements and enforcement of these regulations. However, the implications beyond those entities that operate in Massachusetts may be longstanding as well.
Information Security Law Trend: From Generalities to Specificity
While information security statutes and regulations are fairly new developments in United States law, the previous trend reflected a bifurcated approach by federal and state authorities. On the one hand, were somewhat ambiguous reasonableness standards imposed by states such as California and Texas. On the other hand, were detailed regulations imposed upon industry sectors commonly involved in the handling of sensitive personal information, such as the HIPAA Security Rule, GLB Safeguards Rule, and FCRA/FACTA Disposal Rule.
As press reports of significant breaches of sensitive personal information continued to mount, state lawmakers have taken an increasingly aggressive approach to regulation. Starting with the rather quiet passage of the Oregon Identity Theft Protection Act and more widely noted passage of the Minnesota Plastic Card Security Act, both in 2007, several states have attempted to adopt detailed information security obligations applicable to all entities that handle sensitive personal information. Accordingly, Nevada has recently revised its data protection statute, which includes an obligation that businesses that handle credit card transactions must comply with the Payment Card Industry Data Security Standard (similar to the Minnesota Plastic Card Security Act). Meanwhile, detailed information security regulations remain under development in New Jersey.
A New Revolution Starts in Massachusetts
The Massachusetts Standards stand as a unique development in this lineage because they are notably more comprehensive than the reasonable security statutes implemented in many states and expressly disclaim any exemptions based upon compliance with other regulatory schemes (whether self regulatory such as PCI DSS or federal such as HIPAA and GLB). In fact, the Massachusetts Standards include a number of technical requirements that are not spelled out in similar detail in the federal sector-specific regulations. For example, the Massachusetts Standards expressly require the implementation of network firewalls and regularly scheduled patching of operating systems, obligations that are not expressed in either the HIPAA Security Rule or the GLB Safeguards Rule.
While the Commonwealth’s enforcement agenda remains to be seen, particularly with respect to out-of-state organizations, the regulations are likely to have a distinct impact on many entities. The wide scope of the regulations themselves (covering many administrative, physical, and technical security areas) and the entities arguably subject to the regulations (any entity, regardless of size, that collects sensitive personal information from Massachusetts residents), will compel a significant number of organizations to consider their compliance alternatives.
Although the Massachusetts Standards are designed to scale to the unique circumstances of each entity subject to the obligations (a point reemphasized in revisions issued on August 17, 2009), it is yet to be seen how the enforcement authorities will apply this scalability in practice. Some of the provisions introduced in an attempt to increase the flexibility of the regulations have inadvertently led to new ambiguities. For instance, the technical security requirements are only necessary to the degree that they are “technically feasible.” However, the definition of “technically feasible” (“if there is a reasonable means through technology to accomplish a required result, then that reasonable means must be used”) provides limited practical guidance. Regardless of their ultimate decisions, entities will be assuming a certain level of risk with any compliance decision until the Massachusetts authorities establish further guidance, either through supplemental documents or enforcement actions.
All that being said, many elements of the Massachusetts Standards are more evolutionary than revolutionary, but their impact may remain substantial. For example, the Massachusetts Office of Consumer Affairs and Business Regulation has stated in its official Frequently Asked Questions that all backup media must be encrypted prospectively. While encryption has been a solution of choice for legislators and regulators for sometime now, it has historically been encouraged as a form of safe harbor for data breach notification requirements (in state law and recently issued federal health data breach notification regulations). However, the Massachusetts Standards join the Nevada encryption law in mandating the encryption of sensitive personal information both during transmission and during storage on portable devices and media. The financial and opportunity costs of such wide ranging obligations to encrypt data may prove substantial and enterprises should be planning accordingly.
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