Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

HF 1913

2nd Engrossment - 92nd Legislature (2021 - 2022) Posted on 04/13/2021 11:19am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 2nd Engrossment

Line numbers 1.1 1.2 1.3 1.4 1.5
1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22 6.23 6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21 7.22 7.23 7.24 7.25 7.26 7.27 7.28 7.29 7.30 7.31 7.32 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8
8.9 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 8.20 8.21 8.22 8.23 8.24 8.25 8.26 8.27 8.28 8.29 8.30
9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 9.20 9.21 9.22 9.23 9.24 9.25 9.26 9.27 9.28 9.29 9.30 9.31 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 11.20 11.21 11.22 11.23 11.24 11.25 11.26 11.27 11.28 11.29 11.30 11.31 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 12.20 12.21 12.22 12.23 12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32 12.33 12.34
13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 13.11
13.12 13.13 13.14 13.15 13.16 13.17 13.18 13.19 13.20 13.21 13.22 13.23 13.24 13.25 13.26 13.27 13.28 13.29 13.30 13.31 13.32 14.1 14.2 14.3 14.4 14.5 14.6 14.7 14.8 14.9 14.10 14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18 14.19 14.20 14.21 14.22 14.23 14.24 14.25 14.26 14.27 14.28 14.29 14.30 14.31
15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 15.10 15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 15.23 15.24 15.25
15.26 15.27 15.28
15.29 15.30
16.1 16.2 16.3 16.4 16.5

A bill for an act
relating to insurance; establishing an Insurance Data Security Law; proposing
coding for new law in Minnesota Statutes, chapter 60A; repealing Minnesota
Statutes 2020, sections 60A.98; 60A.981; 60A.982.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [60A.985] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin As used in sections 60A.985 to 60A.9857, the following terms
have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Authorized individual. new text end

new text begin "Authorized individual" means an individual known
to and screened by the licensee and determined to be necessary and appropriate to have
access to the nonpublic information held by the licensee and its information systems.
new text end

new text begin Subd. 3. new text end

new text begin Consumer. new text end

new text begin "Consumer" means an individual, including but not limited to an
applicant, policyholder, insured, beneficiary, claimant, and certificate holder who is a resident
of this state and whose nonpublic information is in a licensee's possession, custody, or
control.
new text end

new text begin Subd. 4. new text end

new text begin Cybersecurity event. new text end

new text begin "Cybersecurity event" means an event resulting in
unauthorized access to, or disruption or misuse of, an information system or nonpublic
information stored on an information system.
new text end

new text begin Cybersecurity event does not include the unauthorized acquisition of encrypted nonpublic
information if the encryption, process, or key is not also acquired, released, or used without
authorization.
new text end

new text begin Cybersecurity event does not include an event with regard to which the licensee has
determined that the nonpublic information accessed by an unauthorized person has not been
used or released and has been returned or destroyed.
new text end

new text begin Subd. 5. new text end

new text begin Encrypted. new text end

new text begin "Encrypted" means the transformation of data into a form which
results in a low probability of assigning meaning without the use of a protective process or
key.
new text end

new text begin Subd. 6. new text end

new text begin Information security program. new text end

new text begin "Information security program" means the
administrative, technical, and physical safeguards that a licensee uses to access, collect,
distribute, process, protect, store, use, transmit, dispose of, or otherwise handle nonpublic
information.
new text end

new text begin Subd. 7. new text end

new text begin Information system. new text end

new text begin "Information system" means a discrete set of electronic
information resources organized for the collection, processing, maintenance, use, sharing,
dissemination, or disposition of nonpublic electronic information, as well as any specialized
system such as industrial or process controls systems, telephone switching and private
branch exchange systems, and environmental control systems.
new text end

new text begin Subd. 8. new text end

new text begin Licensee. new text end

new text begin "Licensee" means any person licensed, authorized to operate, or
registered, or required to be licensed, authorized, or registered by the Department of
Commerce or the Department of Health under chapters 59A to 62M and 62Q to 79A.
new text end

new text begin Subd. 9. new text end

new text begin Multifactor authentication. new text end

new text begin "Multifactor authentication" means authentication
through verification of at least two of the following types of authentication factors:
new text end

new text begin (1) knowledge factors, such as a password;
new text end

new text begin (2) possession factors, such as a token or text message on a mobile phone; or
new text end

new text begin (3) inherence factors, such as a biometric characteristic.
new text end

new text begin Subd. 10. new text end

new text begin Nonpublic information. new text end

new text begin "Nonpublic information" means electronic information
that is not publicly available information and is:
new text end

new text begin (1) any information concerning a consumer which because of name, number, personal
mark, or other identifier can be used to identify the consumer, in combination with any one
or more of the following data elements:
new text end

new text begin (i) Social Security number;
new text end

new text begin (ii) driver's license number or nondriver identification card number;
new text end

new text begin (iii) financial account number, credit card number, or debit card number;
new text end

new text begin (iv) any security code, access code, or password that would permit access to a consumer's
financial account; or
new text end

new text begin (v) biometric records; or
new text end

new text begin (2) any information or data, except age or gender, in any form or medium created by or
derived from a health care provider or a consumer that can be used to identify a particular
consumer and that relates to:
new text end

new text begin (i) the past, present, or future physical, mental, or behavioral health or condition of any
consumer or a member of the consumer's family;
new text end

new text begin (ii) the provision of health care to any consumer; or
new text end

new text begin (iii) payment for the provision of health care to any consumer.
new text end

new text begin Subd. 11. new text end

new text begin Person. new text end

new text begin "Person" means any individual or any nongovernmental entity,
including but not limited to any nongovernmental partnership, corporation, branch, agency,
or association.
new text end

new text begin Subd. 12. new text end

new text begin Publicly available information. new text end

new text begin "Publicly available information" means any
information that a licensee has a reasonable basis to believe is lawfully made available to
the general public from: federal, state, or local government records; widely distributed
media; or disclosures to the general public that are required to be made by federal, state, or
local law.
new text end

new text begin For the purposes of this definition, a licensee has a reasonable basis to believe that
information is lawfully made available to the general public if the licensee has taken steps
to determine:
new text end

new text begin (1) that the information is of the type that is available to the general public; and
new text end

new text begin (2) whether a consumer can direct that the information not be made available to the
general public and, if so, that such consumer has not done so.
new text end

new text begin Subd. 13. new text end

new text begin Risk assessment. new text end

new text begin "Risk assessment" means the risk assessment that each
licensee is required to conduct under section 60A.9853, subdivision 3.
new text end

new text begin Subd. 14. new text end

new text begin State. new text end

new text begin "State" means the state of Minnesota.
new text end

new text begin Subd. 15. new text end

new text begin Third-party service provider. new text end

new text begin "Third-party service provider" means a person,
not otherwise defined as a licensee, that contracts with a licensee to maintain, process, or
store nonpublic information, or is otherwise permitted access to nonpublic information
through its provision of services to the licensee.
new text end

Sec. 2.

new text begin [60A.9851] INFORMATION SECURITY PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Implementation of an information security program. new text end

new text begin Commensurate
with the size and complexity of the licensee, the nature and scope of the licensee's activities,
including its use of third-party service providers, and the sensitivity of the nonpublic
information used by the licensee or in the licensee's possession, custody, or control, each
licensee shall develop, implement, and maintain a comprehensive written information
security program based on the licensee's risk assessment and that contains administrative,
technical, and physical safeguards for the protection of nonpublic information and the
licensee's information system.
new text end

new text begin Subd. 2. new text end

new text begin Objectives of an information security program. new text end

new text begin A licensee's information
security program shall be designed to:
new text end

new text begin (1) protect the security and confidentiality of nonpublic information and the security of
the information system;
new text end

new text begin (2) protect against any threats or hazards to the security or integrity of nonpublic
information and the information system;
new text end

new text begin (3) protect against unauthorized access to, or use of, nonpublic information, and minimize
the likelihood of harm to any consumer; and
new text end

new text begin (4) define and periodically reevaluate a schedule for retention of nonpublic information
and a mechanism for its destruction when no longer needed.
new text end

new text begin Subd. 3. new text end

new text begin Risk assessment. new text end

new text begin The licensee shall:
new text end

new text begin (1) designate one or more employees, an affiliate, or an outside vendor authorized to act
on behalf of the licensee who is responsible for the information security program;
new text end

new text begin (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;
new text end

new text begin (3) assess the likelihood and potential damage of the threats identified pursuant to clause
(2), taking into consideration the sensitivity of the nonpublic information;
new text end

new text begin (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 licensee's operations, including:
new text end

new text begin (i) employee training and management;
new text end

new text begin (ii) information systems, including network and software design, as well as information
classification, governance, processing, storage, transmission, and disposal; and
new text end

new text begin (iii) detecting, preventing, and responding to attacks, intrusions, or other systems failures;
and
new text end

new text begin (5) implement information safeguards to manage the threats identified in its ongoing
assessment, and no less than annually, assess the effectiveness of the safeguards' key controls,
systems, and procedures.
new text end

new text begin Subd. 4. new text end

new text begin Risk management. new text end

new text begin Based on its risk assessment, the licensee shall:
new text end

new text begin (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 licensee's activities,
including its use of third-party service providers, and the sensitivity of the nonpublic
information used by the licensee or in the licensee's possession, custody, or control;
new text end

new text begin (2) determine which of the following security measures are appropriate and implement
any appropriate security measures:
new text end

new text begin (i) 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;
new text end

new text begin (ii) 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 organization's risk strategy;
new text end

new text begin (iii) restrict physical access to nonpublic information to authorized individuals only;
new text end

new text begin (iv) protect, by encryption or other appropriate means, all nonpublic information while
being transmitted over an external network and all nonpublic information stored on a laptop
computer or other portable computing or storage device or media;
new text end

new text begin (v) adopt secure development practices for in-house developed applications utilized by
the licensee;
new text end

new text begin (vi) modify the information system in accordance with the licensee's information security
program;
new text end

new text begin (vii) utilize effective controls, which may include multifactor authentication procedures
for any authorized individual accessing nonpublic information;
new text end

new text begin (viii) regularly test and monitor systems and procedures to detect actual and attempted
attacks on, or intrusions into, information systems;
new text end

new text begin (ix) 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;
new text end

new text begin (x) implement measures to protect against destruction, loss, or damage of nonpublic
information due to environmental hazards, such as fire and water damage, other catastrophes,
or technological failures; and
new text end

new text begin (xi) develop, implement, and maintain procedures for the secure disposal of nonpublic
information in any format;
new text end

new text begin (3) include cybersecurity risks in the licensee's enterprise risk management process;
new text end

new text begin (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; and
new text end

new text begin (5) provide its personnel with cybersecurity awareness training that is updated as
necessary to reflect risks identified by the licensee in the risk assessment.
new text end

new text begin Subd. 5. new text end

new text begin Oversight by board of directors. new text end

new text begin If the licensee has a board of directors, the
board or an appropriate committee of the board shall, at a minimum:
new text end

new text begin (1) require the licensee's executive management or its delegates to develop, implement,
and maintain the licensee's information security program;
new text end

new text begin (2) require the licensee's executive management or its delegates to report in writing, at
least annually, the following information:
new text end

new text begin (i) the overall status of the information security program and the licensee's compliance
with this act; and
new text end

new text begin (ii) 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 management's
responses thereto, and recommendations for changes in the information security program;
and
new text end

new text begin (3) if executive management delegates any of its responsibilities under this section, it
shall oversee the development, implementation, and maintenance of the licensee's information
security program prepared by the delegate and shall receive a report from the delegate
complying with the requirements of the report to the board of directors.
new text end

new text begin Subd. 6. new text end

new text begin Oversight of third-party service provider arrangements. new text end

new text begin (a) A licensee shall
exercise due diligence in selecting its third-party service provider.
new text end

new text begin (b) 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.
new text end

new text begin Subd. 7. new text end

new text begin Program adjustments. new text end

new text begin 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 licensee's own changing business arrangements, such as mergers and
acquisitions, alliances and joint ventures, outsourcing arrangements, and changes to
information systems.
new text end

new text begin Subd. 8. new text end

new text begin Incident response plan. new text end

new text begin (a) 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 licensee's information systems,
or the continuing functionality of any aspect of the licensee's business or operations.
new text end

new text begin (b) The incident response plan shall address the following areas:
new text end

new text begin (1) the internal process for responding to a cybersecurity event;
new text end

new text begin (2) the goals of the incident response plan;
new text end

new text begin (3) the definition of clear roles, responsibilities, and levels of decision-making authority;
new text end

new text begin (4) external and internal communications and information sharing;
new text end

new text begin (5) identification of requirements for the remediation of any identified weaknesses in
information systems and associated controls;
new text end

new text begin (6) documentation and reporting regarding cybersecurity events and related incident
response activities; and
new text end

new text begin (7) the evaluation and revision, as necessary, of the incident response plan following a
cybersecurity event.
new text end

new text begin Subd. 9. new text end

new text begin Annual certification to commissioner. new text end

new text begin (a) Subject to paragraph (b), by April
15 of each year, an insurer domiciled in this state shall certify in writing to the commissioner
that the insurer is in compliance with the requirements set forth in this section. Each insurer
shall maintain all records, schedules, and data supporting this certificate for a period of five
years and shall permit examination by the commissioner. 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 such areas, systems, or processes. Such documentation must be available
for inspection by the commissioner.
new text end

new text begin (b) The commissioner must post on the department's website, no later than 60 days prior
to the certification required by paragraph (a), the form and manner of submission required
and any instructions necessary to prepare the certification.
new text end

Sec. 3.

new text begin [60A.9852] INVESTIGATION OF A CYBERSECURITY EVENT.
new text end

new text begin Subdivision 1. new text end

new text begin Prompt investigation. new text end

new text begin If the licensee learns that a cybersecurity event
has or may have occurred, the licensee, or an outside vendor or service provider designated
to act on behalf of the licensee, shall conduct a prompt investigation.
new text end

new text begin Subd. 2. new text end

new text begin Investigation contents. new text end

new text begin During the investigation, the licensee, or an outside
vendor or service provider designated to act on behalf of the licensee, shall, at a minimum
and to the extent possible:
new text end

new text begin (1) determine whether a cybersecurity event has occurred;
new text end

new text begin (2) assess the nature and scope of the cybersecurity event, if any;
new text end

new text begin (3) identify whether any nonpublic information was involved in the cybersecurity event
and, if so, what nonpublic information was involved; and
new text end

new text begin (4) perform or oversee reasonable measures to restore the security of the information
systems compromised in the cybersecurity event in order to prevent further unauthorized
acquisition, release, or use of nonpublic information in the licensee's possession, custody,
or control.
new text end

new text begin Subd. 3. new text end

new text begin Third-party systems. new text end

new text begin If the licensee learns that a cybersecurity event has or
may have occurred in a system maintained by a third-party service provider, the licensee
will complete the steps listed in subdivision 2 or confirm and document that the third-party
service provider has completed those steps.
new text end

new text begin Subd. 4. new text end

new text begin Records. new text end

new text begin The licensee shall maintain records concerning all cybersecurity
events for a period of at least five years from the date of the cybersecurity event and shall
produce those records upon demand of the commissioner.
new text end

Sec. 4.

new text begin [60A.9853] NOTIFICATION OF A CYBERSECURITY EVENT.
new text end

new text begin Subdivision 1. new text end

new text begin Notification to the commissioner. new text end

new text begin Each licensee shall notify the
commissioner of commerce or commissioner of health, whichever commissioner otherwise
regulates the licensee, without unreasonable delay but in no event later than three business
days from a determination that a cybersecurity event has occurred when either of the
following criteria has been met:
new text end

new text begin (1) this state is the licensee's state of domicile, in the case of an insurer, or this state is
the licensee's home state, in the case of a producer, as those terms are defined in chapter
60K and the cybersecurity event has a reasonable likelihood of materially harming:
new text end

new text begin (i) any consumer residing in this state; or
new text end

new text begin (ii) any part of the normal operations of the licensee; or
new text end

new text begin (2) the licensee reasonably believes that the nonpublic information involved is of 250
or more consumers residing in this state and that is either of the following:
new text end

new text begin (i) a cybersecurity event impacting the licensee of which notice is required to be provided
to any government body, self-regulatory agency, or any other supervisory body pursuant
to any state or federal law; or
new text end

new text begin (ii) a cybersecurity event that has a reasonable likelihood of materially harming:
new text end

new text begin (A) any consumer residing in this state; or
new text end

new text begin (B) any part of the normal operations of the licensee.
new text end

new text begin Subd. 2. new text end

new text begin Information; notification. new text end

new text begin A licensee making the notification required under
subdivision 1 shall provide the information in electronic form as directed by the
commissioner. The licensee shall have a continuing obligation to update and supplement
initial and subsequent notifications to the commissioner concerning material changes to
previously provided information relating to the cybersecurity event. The licensee shall
provide as much of the following information as possible:
new text end

new text begin (1) date of the cybersecurity event;
new text end

new text begin (2) description of how the information was exposed, lost, stolen, or breached, including
the specific roles and responsibilities of third-party service providers, if any;
new text end

new text begin (3) how the cybersecurity event was discovered;
new text end

new text begin (4) whether any lost, stolen, or breached information has been recovered and, if so, how
this was done;
new text end

new text begin (5) the identity of the source of the cybersecurity event;
new text end

new text begin (6) whether the licensee has filed a police report or has notified any regulatory,
government, or law enforcement agencies and, if so, when such notification was provided;
new text end

new text begin (7) description of the specific types of information acquired without authorization.
Specific types of information means particular data elements including, for example, types
of medical information, types of financial information, or types of information allowing
identification of the consumer;
new text end

new text begin (8) the period during which the information system was compromised by the cybersecurity
event;
new text end

new text begin (9) the number of total consumers in this state affected by the cybersecurity event. The
licensee shall provide the best estimate in the initial report to the commissioner and update
this estimate with each subsequent report to the commissioner pursuant to this section;
new text end

new text begin (10) the results of any internal review identifying a lapse in either automated controls
or internal procedures, or confirming that all automated controls or internal procedures were
followed;
new text end

new text begin (11) description of efforts being undertaken to remediate the situation which permitted
the cybersecurity event to occur;
new text end

new text begin (12) a copy of the licensee's privacy policy and a statement outlining the steps the licensee
will take to investigate and notify consumers affected by the cybersecurity event; and
new text end

new text begin (13) name of a contact person who is familiar with the cybersecurity event and authorized
to act for the licensee.
new text end

new text begin Subd. 3. new text end

new text begin Notification to consumers. new text end

new text begin (a) If a licensee is required to submit a report to
the commissioner under subdivision 1, the licensee shall notify any consumer residing in
Minnesota if, as a result of the cybersecurity event reported to the commissioner, the
consumer's nonpublic information was or is reasonably believed to have been acquired by
an unauthorized person, and there is a reasonable likelihood of material harm to the consumer
as a result of the cybersecurity event. Consumer notification is not required for a
cybersecurity event resulting from the good faith acquisition of nonpublic information by
an employee or agent of the licensee for the purposes of the licensee's business, provided
the nonpublic information is not used for a purpose other than the licensee's business or
subject to further unauthorized disclosure. The notification must be made in the most
expedient time possible and without unreasonable delay, consistent with the legitimate needs
of law enforcement or with any measures necessary to determine the scope of the breach,
identify the individuals affected, and restore the reasonable integrity of the data system.
The notification may be delayed to a date certain if the commissioner determines that
providing the notice impedes a criminal investigation. The licensee shall provide a copy of
the notice to the commissioner.
new text end

new text begin (b) For purposes of this subdivision, notice required under paragraph (a) must be provided
by one of the following methods:
new text end

new text begin (1) written notice to the consumer's most recent address in the licensee's records;
new text end

new text begin (2) electronic notice, if the licensee's primary method of communication with the
consumer is by electronic means or if the notice provided is consistent with the provisions
regarding electronic records and signatures in United States Code, title 15, section 7001;
or
new text end

new text begin (3) if the cost of providing notice exceeds $250,000, the affected class of consumers to
be notified exceeds 500,000, or the licensee does not have sufficient contact information
for the subject consumers, notice as follows:
new text end

new text begin (i) e-mail notice when the licensee has an e-mail address for the subject consumers;
new text end

new text begin (ii) conspicuous posting of the notice on the website page of the licensee; and
new text end

new text begin (iii) notification to major statewide media.
new text end

new text begin (c) Notwithstanding paragraph (b), a licensee that maintains its own notification procedure
as part of its information security program that is consistent with the timing requirements
of this subdivision is deemed to comply with the notification requirements if the licensee
notifies subject consumers in accordance with its program.
new text end

new text begin (d) A waiver of the requirements under this subdivision is contrary to public policy, and
is void and unenforceable.
new text end

new text begin Subd. 4. new text end

new text begin Notice regarding cybersecurity events of third-party service providers. new text end

new text begin (a)
In the case of a cybersecurity event in a system maintained by a third-party service provider,
of which the licensee has become aware, the licensee shall treat such event as it would under
subdivision 1 unless the third-party service provider provides the notice required under
subdivision 1.
new text end

new text begin (b) The computation of a licensee's deadlines shall begin on the day after the third-party
service provider notifies the licensee of the cybersecurity event or the licensee otherwise
has actual knowledge of the cybersecurity event, whichever is sooner.
new text end

new text begin (c) Nothing in this act shall prevent or abrogate an agreement between a licensee and
another licensee, a third-party service provider, or any other party to fulfill any of the
investigation requirements imposed under section 60A.9854 or notice requirements imposed
under this section.
new text end

new text begin Subd. 5. new text end

new text begin Notice regarding cybersecurity events of reinsurers to insurers. new text end

new text begin (a) In the
case of a cybersecurity event involving nonpublic information that is used by the licensee
that is acting as an assuming insurer or in the possession, custody, or control of a licensee
that is acting as an assuming insurer and that does not have a direct contractual relationship
with the affected consumers, the assuming insurer shall notify its affected ceding insurers
and the commissioner of its state of domicile within three business days of making the
determination that a cybersecurity event has occurred.
new text end

new text begin (b) The ceding insurers that have a direct contractual relationship with affected consumers
shall fulfill the consumer notification requirements imposed under subdivision 3 and any
other notification requirements relating to a cybersecurity event imposed under this section.
new text end

new text begin (c) In the case of a cybersecurity event involving nonpublic information that is in the
possession, custody, or control of a third-party service provider of a licensee that is an
assuming insurer, the assuming insurer shall notify its affected ceding insurers and the
commissioner of its state of domicile within three business days of receiving notice from
its third-party service provider that a cybersecurity event has occurred.
new text end

new text begin (d) The ceding insurers that have a direct contractual relationship with affected consumers
shall fulfill the consumer notification requirements imposed under subdivision 3 and any
other notification requirements relating to a cybersecurity event imposed under this section.
new text end

new text begin (e) Any licensee acting as an assuming insurer shall have no other notice obligations
relating to a cybersecurity event or other data breach under this section.
new text end

new text begin Subd. 6. new text end

new text begin Notice regarding cybersecurity events of insurers to producers of record. new text end

new text begin (a)
In the case of a cybersecurity event involving nonpublic information that is in the possession,
custody, or control of a licensee that is an insurer or its third-party service provider and for
which a consumer accessed the insurer's services through an independent insurance producer,
the insurer shall notify the producers of record of all affected consumers no later than the
time at which notice is provided to the affected consumers.
new text end

new text begin (b) The insurer is excused from this obligation for those instances in which it does not
have the current producer of record information for any individual consumer or in those
instances in which the producer of record is no longer appointed to sell, solicit, or negotiate
on behalf of the insurer.
new text end

Sec. 5.

new text begin [60A.9854] POWER OF COMMISSIONER.
new text end

new text begin (a) The commissioner of commerce or commissioner of health, whichever commissioner
otherwise regulates the licensee, shall have power to examine and investigate into the affairs
of any licensee to determine whether the licensee has been or is engaged in any conduct in
violation of sections 60A.985 to 60A.9857. This power is in addition to the powers which
the commissioner has under section 60A.031. Any such investigation or examination shall
be conducted pursuant to section 60A.031.
new text end

new text begin (b) Whenever the commissioner of commerce or commissioner of health has reason to
believe that a licensee has been or is engaged in conduct in this state which violates sections
60A.985 to 60A.9857, the commissioner of commerce or commissioner of health may take
action that is necessary or appropriate to enforce those sections.
new text end

Sec. 6.

new text begin [60A.9855] CONFIDENTIALITY.
new text end

new text begin Subdivision 1. new text end

new text begin Licensee information. new text end

new text begin Any documents, materials, or other information
in the control or possession of the department that are furnished by a licensee or an employee
or agent thereof acting on behalf of a licensee pursuant to section 60A.9851, subdivision
9; section 60A.9853, subdivision 2, clauses (2), (3), (4), (5), (8), (10), and (11); or that are
obtained by the commissioner in an investigation or examination pursuant to section
60A.9854 shall be classified as confidential, protected nonpublic, or both; shall not be
subject to subpoena; and shall not be subject to discovery or admissible in evidence in any
private civil action. However, the commissioner is authorized to use the documents, materials,
or other information in the furtherance of any regulatory or legal action brought as a part
of the commissioner's duties.
new text end

new text begin Subd. 2. new text end

new text begin Certain testimony prohibited. new text end

new text begin Neither the commissioner nor any person who
received documents, materials, or other information while acting under the authority of the
commissioner shall be permitted or required to testify in any private civil action concerning
any confidential documents, materials, or information subject to subdivision 1.
new text end

new text begin Subd. 3. new text end

new text begin Information sharing. new text end

new text begin In order to assist in the performance of the commissioner's
duties under this act, the commissioner:
new text end

new text begin (1) may share documents, materials, or other information, including the confidential and
privileged documents, materials, or information subject to subdivision 1, with other state,
federal, and international regulatory agencies, with the National Association of Insurance
Commissioners, its affiliates or subsidiaries, and with state, federal, and international law
enforcement authorities, provided that the recipient agrees in writing to maintain the
confidentiality and privileged status of the document, material, or other information;
new text end

new text begin (2) may receive documents, materials, or information, including otherwise confidential
and privileged documents, materials, or information, from the National Association of
Insurance Commissioners, its affiliates or subsidiaries, and from regulatory and law
enforcement officials of other foreign or domestic jurisdictions, and shall maintain as
confidential or privileged any document, material, or information received with notice or
the understanding that it is confidential or privileged under the laws of the jurisdiction that
is the source of the document, material, or information;
new text end

new text begin (3) may share documents, materials, or other information subject to subdivision 1, with
a third-party consultant or vendor provided the consultant agrees in writing to maintain the
confidentiality and privileged status of the document, material, or other information; and
new text end

new text begin (4) may enter into agreements governing sharing and use of information consistent with
this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin No waiver of privilege or confidentiality. new text end

new text begin No waiver of any applicable privilege
or claim of confidentiality in the documents, materials, or information shall occur as a result
of disclosure to the commissioner under this section or as a result of sharing as authorized
in subdivision 3. Any document, material, or information disclosed to the commissioner
under this section about a cybersecurity event must be retained and preserved by the licensee
for the time period under section 541.05, or longer if required by the licensee's document
retention policy.
new text end

new text begin Subd. 5. new text end

new text begin Certain actions public. new text end

new text begin Nothing in sections 60A.985 to 60A.9857 shall prohibit
the commissioner from releasing final, adjudicated actions that are open to public inspection
pursuant to chapter 13 to a database or other clearinghouse service maintained by the National
Association of Insurance Commissioners, its affiliates, or subsidiaries.
new text end

new text begin Subd. 6. new text end

new text begin Classification, protection, and use of information by others. new text end

new text begin Documents,
materials, or other information in the possession or control of the National Association of
Insurance Commissioners or a third-party consultant pursuant to sections 60A.985 to
60A.9857 are classified as confidential, protected nonpublic, and privileged; are not subject
to subpoena; and are not subject to discovery or admissible in evidence in a private civil
action.
new text end

Sec. 7.

new text begin [60A.9856] EXCEPTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin The following exceptions shall apply to sections 60A.985 to
60A.9857:
new text end

new text begin (1) a licensee with fewer than 25 employees is exempt from sections 60A.9851 and
60A.9852;
new text end

new text begin (2) a licensee subject to and in compliance with the Health Insurance Portability and
Accountability Act, Public Law 104-191, 110 Stat. 1936 (HIPAA), is considered to comply
with sections 60A.9851, 60A.9852, and 60A.9853, subdivisions 3 to 5, provided the licensee
submits a written statement certifying its compliance with HIPAA;
new text end

new text begin (3) a licensee affiliated with a depository institution that maintains an information security
program in compliance with the interagency guidelines establishing standards for
safeguarding customer information as set forth pursuant to United States Code, title 15,
sections 6801 and 6805, shall be considered to meet the requirements of section 60A.9851
provided that the licensee produce, upon request, documentation satisfactory to the
commission that independently validates the affiliated depository institution's adoption of
an information security program that satisfies the interagency guidelines;
new text end

new text begin (4) an employee, agent, representative, or designee of a licensee, who is also a licensee,
is exempt from sections 60A.9851 and 60A.9852 and need not develop its own information
security program to the extent that the employee, agent, representative, or designee is covered
by the information security program of the other licensee; and
new text end

new text begin (5) an employee, agent, representative, or designee of a producer licensee, as defined
under section 60K.31, subdivision 6, who is also a licensee, is exempt from sections 60A.985
to 60A.9857.
new text end

new text begin Subd. 2. new text end

new text begin Exemption lapse; compliance. new text end

new text begin In the event that a licensee ceases to qualify
for an exception, such licensee shall have 180 days to comply with this act.
new text end

Sec. 8.

new text begin [60A.9857] PENALTIES.
new text end

new text begin In the case of a violation of sections 60A.985 to 60A.9856, a licensee may be penalized
in accordance with section 60A.052.
new text end

Sec. 9. new text beginREPEALER.
new text end

new text begin Minnesota Statutes 2020, sections 60A.98; 60A.981; and 60A.982, new text end new text begin are repealed.
new text end

Sec. 10. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 9 are effective August 1, 2021. Licensees have one year from the effective
date to implement Minnesota Statutes, section 60A.9851, subdivisions 1 to 5 and 7 to 9,
and two years from the effective date of this act to implement Minnesota Statutes, section
60A.9851, subdivision 6.
new text end

APPENDIX

Repealed Minnesota Statutes: H1913-2

60A.98 DEFINITIONS.

Subdivision 1.

Scope.

For purposes of sections 60A.98 and 60A.981, the terms defined in this section have the meanings given them.

Subd. 2.

Customer.

"Customer" means a consumer who has a continuing relationship with a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family, or household purposes.

Subd. 3.

Customer information.

"Customer information" means nonpublic personal information about a customer, whether in paper, electronic, or other form, that is maintained by or on behalf of the licensee.

Subd. 4.

Customer information systems.

"Customer information systems" means the electronic or physical methods used to access, collect, store, use, transmit, protect, or dispose of customer information.

Subd. 5.

Licensee.

"Licensee" means all licensed insurers, producers, and other persons licensed or required to be licensed, authorized or required to be authorized, or registered or required to be registered pursuant to the insurance laws of this state, except that "licensee" does not include a purchasing group or an ineligible insurer in regard to the surplus line insurance conducted pursuant to sections 60A.195 to 60A.209. "Licensee" does not include producers until January 1, 2007.

Subd. 6.

Nonpublic financial information.

"Nonpublic financial information" means:

(1) personally identifiable financial information; and

(2) any list, description, or other grouping of consumers, and publicly available information pertaining to them, that is derived using any personally identifiable financial information that is not publicly available.

Subd. 7.

Nonpublic personal health information.

"Nonpublic personal health information" means health information:

(1) that identifies an individual who is the subject of the information; or

(2) with respect to which there is a reasonable basis to believe that the information could be used to identify an individual.

Subd. 8.

Nonpublic personal information.

"Nonpublic personal information" means nonpublic financial information and nonpublic personal health information.

Subd. 9.

Personally identifiable financial information.

"Personally identifiable financial information" means any information:

(1) a consumer provides to a licensee to obtain an insurance product or service from the licensee;

(2) about a consumer resulting from a transaction involving an insurance product or service between a licensee and a consumer; or

(3) the licensee otherwise obtains about a consumer in connection with providing an insurance product or service to that consumer.

Subd. 10.

Service provider.

"Service provider" means a person that maintains, processes, or otherwise is permitted access to customer information through its provision of services directly to the licensee.

60A.981 INFORMATION SECURITY PROGRAM.

Subdivision 1.

General requirements.

Each 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 must be appropriate to the size and complexity of the licensee and the nature and scope of its activities.

Subd. 2.

Objectives.

A licensee's information security program must be designed to:

(1) ensure the security and confidentiality of customer information;

(2) protect against any anticipated threats or hazards to the security or integrity of the information; and

(3) protect against unauthorized access to or use of the information that could result in substantial harm or inconvenience to any customer.

Subd. 3.

Examples of methods of development and implementation.

The following actions and procedures are examples of methods of implementation of the requirements of subdivisions 1 and 2. These examples are nonexclusive illustrations of actions and procedures that licensees may follow to implement subdivisions 1 and 2:

(1) the licensee:

(i) identifies reasonably foreseeable internal or external threats that could result in unauthorized disclosure, misuse, alteration, or destruction of customer information or customer information systems;

(ii) assesses the likelihood and potential damage of these threats, taking into consideration the sensitivity of customer information; and

(iii) assesses the sufficiency of policies, procedures, customer information systems, and other safeguards in place to control risks;

(2) the licensee:

(i) 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 licensee's activities;

(ii) trains staff, as appropriate, to implement the licensee's information security program; and

(iii) 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 licensee's risk assessment;

(3) the licensee:

(i) exercises appropriate due diligence in selecting its service providers; and

(ii) requires its service providers to implement appropriate measures designed to meet the objectives of this regulation, and, where indicated by the licensee's risk assessment, takes appropriate steps to confirm that its service providers have satisfied these obligations; and

(4) 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 licensee's own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements, and changes to customer information systems.

60A.982 UNFAIR TRADE PRACTICES.

A violation of sections 60A.98 and 60A.981 is considered to be a violation of sections 72A.17 to 72A.32.