Delaware Insurance Data Security Act Signed into Law

Delaware Governor John Carney signed House Bill 174, titled the Delaware Insurance Data Security Act, into law on Wednesday, July 31, 2019.

This law is based on an NAIC Model Act, which establishes a comprehensive regulatory framework requiring insurers licensed to do business in Delaware to implement information security programs and report instances of data breaches in a prescribed timely manner to the Delaware insurance commissioner and consumers. It also empowers the Department of Insurance to investigate violations of the act and levy penalties accordingly.

“When hardworking consumers entrust their personal data to their insurance companies, they have a reasonable expectation that their carriers will do everything they can to safeguard that information,” stated Delaware Insurance Commissioner Trinidad Navarro in a press release issued by the Department of Insurance.

Work on enhancing insurance data security began after the Anthem data breach in 2015, in which hackers compromised nearly 80 million individuals’ personal information, according to the release.

Since then, there have been 15 insurance data breaches with Delawareans impacted, the most recent involving Dominion National, a dental insurance carrier. The number of Delawareans impacted by the breaches during that period of time ranged from one policyholder to more than 95,000 policyholders, the release stated.

“Over the past several years, we have witnessed time and again consumers’ information be compromised or stolen by hackers’ cyber threats to insurers,” Navarro said in the release. “By codifying a regulatory standard that requires all insurance licensees in Delaware to implement information security programs and timely report data breaches to the department and consumers, HB 174 enhances Delaware’s consumer protection measures to hold companies accountable and give consumers the peace of mind that they deserve.”

HB 174’s prime sponsors were Representative William Bush, chair of the House Economic Development, Banking, Insurance & Commerce Committee, and Senator Trey Paradee, chair of the Senate Business, Banking & Insurance Committee.

The act passed the House on June 13, 2019, with 40 ‘yes’ votes. The bill cleared its final hurdle on June 26, 2019, with the Delaware Senate voting unanimously in favor. Consumers and producers who have questions about the new law are encouraged to contact the Department of Insurance’s Consumer Services Division.

Source: Delaware Department of Insurance

Topics Cyber Legislation Data Driven Delaware