A proposal by Indiana’s Attorney General Curtis Hill on Wednesday would add a significant step in the incident response process for responding to breaches of security affecting Indiana residents. On Wednesday, during a U.S. Chamber of Commerce virtual event, he announced his proposed rule designed to better protect Hoosiers from cyberattacks. It is expected that the proposed rule will take effect by the end of the year.

In short, there are two components to the proposed regulations:

  • A requirement for data base owners to create, implement and report a corrective action plan (CAP) to the Attorney General within thirty days of the date it reports a breach to the Attorney General under the state’s existing breach notification law.
  • A “safe harbor” for what constitutes “reasonable measures” to safeguard personal information in Indiana.

If the regulations are adopted, covered entities will need to revisit their incident response plans to ensure they have steps in place to timely submit a CAP to the Attorney General’s office. They might also consider modifying their data security plans to take advantage of the safe harbor.

Currently, Indiana law imposes general requirements on data base owners to “implement and maintain reasonable procedures, including taking any appropriate corrective action, to protect and safeguard from unlawful use or disclosure any personal information of Indiana residents collected or maintained by the data base owner.” Data base owners include persons that own or license computerized data that include personal information. As in several other states, these general obligations have not been well defined. AG Hill’s proposed rule, if adopted, would provide some clarity creating several duties for data base owners.

First, the general requirement to take “any appropriate corrective action” would, in the context of a data breach, mean the following:

  • Continuously monitoring and remediating potential vulnerabilities in a timely fashion.
  • Taking reasonable steps to mitigate and prevent the continued unlawful use and disclosure of personal information following any breach of security of data.
  • Preparing a written CAP following any breach of security of data which does the following:
    • Outlines the nature and all known or potential causes of the breach with reasonable specificity and citations to applicable technical data.
    • Identifies the precise date and time of the initial breach, and any subsequent breaches, if feasible.
    • Confirms that corrected measures were implemented at the earliest reasonable opportunity.
    • Identifies the specific categories of personal information subject to unlawful use or disclosure, including the approximate number of individuals affected.
    • Identifies what steps have already been taken to mitigate and prevent the continued unlawful use and disclosure of personal information.
    • Identifies a specific corrective plan to mitigate and prevent the continued unlawful use and disclosure of personal information.
  • Certify the development and implementation of the CAP to the Attorney General under penalty of perjury within thirty (30) days of providing notice of the breach to the Attorney General under existing law. Among other requirements for the CAP, the Attorney General would be authorized to conduct random and unannounced audits.

In short, simply complying with the disclosure and notification requirements under Indiana’s existing breach notification law (IC 24-4.9-3) would not, by itself, constitute appropriate corrective action following a breach.

We need a way to separate the businesses that are taking important steps to secure data from those who are not,” Attorney General Hill said. “This rule would provide businesses a playbook on how to protect data, and would protect the businesses that follow the playbook. It’s a win for both consumers and businesses.

Second, the proposed rule outlines a “safe harbor” for what constitutes “reasonable measures” protect personal information. More specifically, the rule identifies certain data security frameworks that, if adopted, would be presumed reasonable. These include:

  • a cybersecurity program that complies with the National Institute of Standards and Technology (NIST) cybersecurity framework and follows the most recent version of specified standards, such as NIST Special Publication 800-171,
  • for certain regulated covered entities, compliance with the following:
    • The federal USA Patriot Act.
    • Executive Order 13224.
    • The federal Driver’s Privacy Protection Act.
    • The federal Fair Credit Reporting Act.
    • The federal Health Insurance Portability and Accountability Act
  • Entities that comply with the payment card industry data security standard (PCI) in place at the time of the breach of security of data.

Because data security is not a one-time process, maintaining the safe harbor under the NIST framework requires the covered entity to implement any new version of the applicable standard.  Any data security plan also would need to monitor vulnerabilities tracked by NIST National Vulnerability Database, and for each critical vulnerability commence remediation planning within twenty-four (24) hours after the vulnerability has been rated as such, and apply the remediation within one (1) week thereafter. Additionally, covered entities must conduct risk assessments annually and revise their data security plans accordingly.

The safe harbor provides further that data base owners which can bear the burden of demonstrating their data security plan is reasonably designed will not be subject to a civil action from the Office of the Attorney General arising from the breach of security of data.

It is worth nothing that the frameworks listed might not apply to all of the data maintained by a covered entity. For example, the privacy and security regulations under HIPAA would not apply to employee data or other activities of the covered entity that does not involve “protected health information,” but would involve personal information of Indiana residents. The regulations are unclear on this point, and covered entities must still consider reasonable measures for that data for the safe harbor to apply.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently leads the firm’s Privacy, e-Communication and Data Security Practice, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with…

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently leads the firm’s Privacy, e-Communication and Data Security Practice, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Mr. Lazzarotti also is a member of the firm’s Employee Benefits Practice Group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Mr. Lazzarotti counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Mr. Lazzarotti’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Mr. Lazzarotti speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Mr. Lazzarotti served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.