Maryland Amends Data Breach Notification Law

By Edward J. McAndrew, David M. Stauss and Gregory Szewczyk © Ballard Spahr Aug 9, 2017

The Maryland General Assembly recently amended the Maryland Personal Information Protection Act to expand the definition of personal information, provide a 45-day timeframe for providing notice of a breach, allow for substitute service when the breach enables an individual's e-mail to be accessed and increase the class of information subject to Maryland's destruction of records laws. The new law takes effect on Jan. 1, 2018.

Maryland's data breach notification statute—Md. Code Com. Law §14-3501—currently defines "personal information" as a person's first name or first initial and last name combined with any of the following data elements: social security number; driver's license number; financial account number, including a credit or debit card number that in combination with any required security code, access code or password would permit access to an individual's financial account; or individual taxpayer identification number.

The new law expands that definition to include:

  • Passport numbers and other identification numbers issued by the federal government.
  • State identification card numbers.
  • Health information, defined to include any information created by an entity covered by HIPAA regarding an individual's medical history, condition, treatment or diagnosis.
  • A health insurance policy, certificate number or health insurance subscriber identification number in combination with a unique identifier that permits access to the information.
  • Biometric data, such as a fingerprint, voice print, genetic print, retina or iris image, or other unique biological characteristic that can be used to uniquely authenticate a person's identity upon accessing a system or account.
  • A user name or e-mail address in combination with a password or security question and answer that permits access to the account.

The new law also adds Maryland to the growing number of states that require notification within a set period of time as opposed to a more general, "as soon as possible" standard. Specifically, the law amends Md. Code Com. Law §14-3504 to require that notice be provided "as soon as reasonably practicable, but not later than 45 days" after the entity concludes that the breach has created a likelihood that the personal information has been or will be misused.

In addition, the new law allows for alternative notice when a security system breach involves only the loss of personal information that enables access to an individual's email account.

In that situation, the business may, subject to certain exceptions, provide notice electronically that directs the person to change his or her password and security questions/answers and "take other steps appropriate to protect the e-mail account with the business and all other online accounts for which the individual uses the same username or e-mail and password or security question or answer."

The notification must be given "by a clear and conspicuous notice delivered to the individual online while the individual is connected to the affected e-mail account from an internet protocol address or online location from which the business knows the individual customarily accesses the account."

Further, the law amends Md. Code Com. Law §14-3502 to expand the class of information subject to Maryland's destruction of records laws. The previous version of Maryland's law only covered customer records; the amended law will cover records relating to employees and former employees that contain personal information.

Perhaps the most notable aspect of the law is what it does not include. Section 14-3503(a) currently requires businesses that own or license the personal information of Maryland residents to "implement and maintain reasonable security procedures and practices that are appropriate to the nature of the personal information owned or licensed and the nature and size of the business and its operations."

Section 14-3503(b)(1) further requires that businesses that disclose personal information to third-party service providers must contractually require them to "implement and maintain reasonable security procedures and practices" to protect against unauthorized access, use or destruction of the information. However, the statute does not define "reasonable security procedures and practices."

The originally proposed version of the new law would have defined "reasonable security procedures and practices" to require covered entities to implement specific information security provisions. Covered entities would have been required to maintain a written information security policy, designate responsible parties to oversee an information security program, conduct risk assessments and address safeguards to control the identified risks, ensure that service providers adequately safeguard personal information, and implement changes based on periodic evaluations.

If adopted, those provisions would have made Maryland's statute one of the more comprehensive and specific state information security statutes. But because the specific requirements were not included in the final bill, Maryland law continues to require only that entities implement and maintain undefined "reasonable security procedures and practices."

The revised Maryland law is a reminder that state breach notification laws are constantly evolving and that states are considering more stringent information security requirements. Businesses should stay up-to-date on compliance and notification obligations.

Edward J. McAndrew is an attorney with Ballard Spahr in Washington, D.C. David M. Stauss and Gregory Szewczyk are attorneys with Ballard Spahr in Denver. © Ballard Spahr. All rights reserved. Reposted with permission. 

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