N.Y. Attorney General Urges Lawmakers To Seek State Law Data Security Upgrade

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Jan. 15 — New York Attorney General Eric Schneiderman (D ) Jan. 14 announced a legislative proposal to strengthen protections for sensitive information by expanding the state's breach notification law to cover e-mails, passwords and health data and require companies to implement data security measures.

“It's long past time we updated our security laws and expanded protections for consumers,” Schneiderman said. “Our new law will be the strongest, most comprehensive in the nation.”

Schneiderman said the spate of large data breaches over the last twelve months provided strong motivation to enact stronger data security measures. He cited his July 2014 report that found the number of reported data security breaches in New York more than tripled between 2006 and 2013, which cost the public and private sectors in New York upward of $1.37 billion in 2013 alone.

Breach Notice Law Expansion

The proposed legislation would amend the state's data breach notification statute, which was enacted in 2005, to expand the definition of protected personal information, Schneiderman said in a statement.

He said N.Y. lawmakers should follow the lead of California to cover “both the combination of an email address and password, and an email address in combination with a security question and answer.”

California updated its breach notice statute with those changes in September 2013.

The proposed law would also expand the definition of protected personal information to include medical history and health insurance information, the statement said.

New Data Security Requirements

N.Y. doesn't directly require companies to secure consumer data, Schneiderman said.

His proposed law would require all companies to have reasonable data security measures, including administrative, technical and physical safeguards and to obtain independent data security certification.

As an incentive for adopting strong data security standards, the proposed law would provide a liability safe harbor for companies that adopted a certified risk-based data security plan, Schneiderman said.

In the statement, Alan C. Raul, a partner at Sidle Austin LLP in Washington, likened the safe harbor provision to the U.S. Department of Commerce National Institute of Standards and Technology voluntary cybersecurity framework released in February 2014.

Schneiderman also suggested that lawmakers in Albany adopt provisions to ensure that companies could share cybersecurity threat and data breach information with law enforcement officials without fear of sacrificing any “privilege or protection” for the information.