On November 4, 2009, the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR) filed final amendments to the state’s data security rules, set forth in 201 CMR 17. Most of the provisions are identical to the proposed rules released in August 2009. These amendments to not change the effective date of the rules, which is still March 1, 2010.
Standards for Protecting Personal Information
The Regulation specifically presents standards to be met by “persons [i] ” who own or license personal information about a resident of the Commonwealth of Massachusetts. However, the location of the person is not relevant; rather it is the location of the individual about whom the personal information is “owned, licensed, received, stored, maintained, or processed (i.e., resident of Massachusetts). In addition, it insures the security and confidentiality of such information in a manner fully consistent with industry standards; protects against anticipated threats or hazards to the security or integrity of such information; and protects against unauthorized access to or use of such information that may result in substantial harm or inconvenience to any consumer.
The Regulation requires persons to develop, implement, and maintain a comprehensive, written information security program applicable to any records containing such personal information.
As codified in section 17.03 (2)(a-j) of the Regulation, the information security program shall include, but shall not be limited to:
(a) Designating one or more employees to maintain the comprehensive information security program.
(b) Identifying and assessing reasonably foreseeable internal and external risks to the security, confidentiality, and/or integrity of any electronic, paper or other records containing personal information, and evaluating and improving, where necessary, the effectiveness of the current safeguards for limiting such risks, including but not limited to:
1. Ongoing employee (including temporary and contract employee) training;
2. Employee compliance with policies and procedures; and
3. Means for detecting and preventing security system failures.
(c) Developing security policies for employees relating to the storage, access and transportation of records containing personal information outside of business premises.
(d) Imposing disciplinary measures for violations of the comprehensive information security program rules.
(e) Preventing terminated employees from accessing records containing personal information.
(f) Oversee service providers, by:
1. Taking reasonable steps to select and retain third-party service providers that are capable of maintaining appropriate security measures to protect such personal information consistent with these regulations and any applicable federal regulations; and
2. Requiring such third-party service providers by contract to implement and maintain such appropriate security measures for personal information; provided, however, that until March 1, 2012, a contract a person has entered into with a third party service provider to perform services for said person or functions on said person’s behalf satisfies the provisions of 17.03(2)(f)(2) even if the contract does not include a requirement that the third party service provider maintain such appropriate safeguards, as long as said person entered into the contract no later than March 1, 2010.
(g) Reasonable restrictions upon physical access to records containing personal information and storage of such records and data in locked facilities, storage areas or containers.
(h) Regular monitoring to ensure that the comprehensive information security program is operating in a manner reasonably calculated to prevent unauthorized access to or unauthorized use of personal information; and upgrading information safeguards as necessary to limit risks.
(i) Reviewing the scope of the security measures at least annually or whenever there is a material change in business practices that may reasonably implicate the security or integrity of records containing personal information.
(j) Documenting responsive actions taken in connection with any incident involving a breach of security, and mandatory post-incident review of events and actions taken, if any, to make changes in business practices relating to protection of personal information.
Computer System Security Requirements
In addition, in section 17.04 (1-8) of the Regulation it states that every person that owns or licenses personal information about a resident of the Commonwealth of Massachusetts and electronically stores or transmits such information shall include in its written, comprehensive information security program the establishment and maintenance of a security system covering its computers, including any wireless system, that, at a minimum, and to the extent technically feasible, shall have the following elements:
(1) Secure user authentication protocols including:
(a) Control of user IDs and other identifiers;
(b) A reasonably secure method of assigning and selecting passwords, or use of unique identifier technologies, such as biometrics or token devices;
(c) Control of data security passwords to ensure that such passwords are kept in a location and/or format that does not compromise the security of the data they protect;
(d) Restricting access to active users and active user accounts only; and
(e) Blocking access to user identification after multiple unsuccessful attempts to gain access or the limitation placed on access for the particular system.
(2) Secure access control measures that:
(a) Restrict access to records and files containing personal information to those who need such information to perform their job duties; and
(b) Assign unique identifications plus passwords, which are not vendor supplied default passwords, to each person with computer access, that are reasonably designed to maintain the integrity of the security of the access controls.
(3) Encryption of all transmitted records and files containing personal information that will travel across public networks, and encryption of all data containing personal information to be transmitted wirelessly.
(4) Reasonable monitoring of systems, for unauthorized use of or access to personal information.
(5) Encryption of all personal information stored on laptops or other portable devices.
(6) For files containing personal information on a system that is connected to the Internet, there must be reasonably up-to-date firewall protection and operating system security patches, reasonably designed to maintain the integrity of the personal information.
(7) Reasonably up-to-date versions of system security agent software which must include malware protection and reasonably up-to-date patches and virus definitions, or a version of such software that can still be supported with up-to-date patches and virus definitions, and is set to receive the most current security updates on a regular basis.
(8) Education and training of employees on the proper use of the computer security system and the importance of personal information security .
[i] Persons is defined in 201 CMR 17 as a natural person, corporation, association, partnership or other legal entity, other than an agency, executive office, department, board, commission, bureau, division or authority of the Commonwealth, or any of its branches, or any political subdivision thereof.
Click here for a sample security plan that can be used by small businesses or individuals that handle “personal information” about residents of the state of Massachusetts.
Click here for an article written by Barry MacQuarrie, a CPA.CITP from the State of Massachusetts discussing the impact on CPAs.
Click here to visit the AICPA Privacy Center that contains numerous publications, articles, checklists and other resources on privacy, including Generally Accepted Privacy Principles (GAPP), a best practices framework for protecting personal information.
Click here to visit the AICPA Information Technology Sections' Information Security resources. You will find white papers available to IT Section members only.