Data Privacy Map - Michigan

Highlights

Covered Entities: A person (individual, partnership, corporation, limited liability company, association, or other legal entity) and agency (department, board, commission, office, agency, or other unit of state government of Michigan, including an institution of higher education of Michigan, but excluding a circuit, probate, district, or municipal court) that owns or licenses personal information about a resident of Michigan.

Consumer Notification: When there is a security breach of personal information.

Regulatory Notification: No.

Notification Timeline: Without unreasonable delay.

Data Format: Electronic.

Citations: Mich. Comp. Laws § 445.61 et seq.

More Details

Definitions:

• Breach: Breach of the security of a database or security breach means the unauthorized access and acquisition of data that compromises the security or confidentiality of personal information maintained by a person or agency as part of a database of personal information regarding multiple individuals.
• Personal Information (PI):
  • Personal information means the first name or first initial and last name linked to one or more of the following data elements of a resident of Michigan:
    • Social Security number;
    • Driver license number or state personal identification card number;
    • Demand deposit or other financial account number, or credit card or debit card number, in combination with any required security code, access code, or password that would permit access to any of the resident’s financial accounts.
• Medical Information: N/A
• Health Insurance Information: N/A

Safe Harbors:

• Encryption: Does not apply to encrypted or redacted information, only if the encryption key is not also acquired.
• Good Faith: A breach does not include unauthorized access by an employee or other individual if the access meets all of the following: (i) the employee or other individual acted in good faith in accessing the data; (ii) the access was related to the activities of the agency or person; and (iii) the employee or other individual did not misuse any personal information or disclose any personal information to an unauthorized person.
• Risk of Harm: Notification is not required if the person or agency determines that the security breach has not or is not likely to cause substantial loss or injury to, or result in identity theft with respect to, one or more residents of Michigan.
• Law Enforcement Delay: Notification may be delay if a law enforcement agency determines and advises the agency or person that providing a notice will impede a criminal or civil investigation or jeopardize homeland or national security.

Direct Notice:

• Timing: Without unreasonable delay, in accordance with any measures necessary to determine the scope of the security breach and restore the reasonable integrity of the database.
• Format: Must be written in a clear and conspicuous manner.
• Content: The notice shall do all of the following:
  • Describe the security breach in general terms.
  • Describe the type of personal information that is the subject of the unauthorized access or use.
  • If applicable, generally describe what the agency or person providing the notice has done to protect data from further security breaches.
  • Include a telephone number where a notice recipient may obtain assistance or additional information.
  • Remind notice recipients of the need to remain vigilante for incidents of fraud and identity theft.
• Method: Written notice sent to the recipient at the recipient’s postal address in the records of the agency or person. Written notice sent electronically to the recipient if any of the following are met: (i) the recipient has expressly consented to receive electronic notice; (ii) the person or agency has an existing business relationship with the recipient that includes periodic electronic mail communications and based on those communications the person or agency reasonably believes that it has the recipient’s current electronic mail address; or (iii) the person or agency conducts its business primarily through internet account transactions or the internet.

Substitute Notice:

Substitute notice is allowed if the person or agency demonstrates that the cost of providing notice will exceed $250,000 or that the person or agency has to provide notice to more than 500,000 residents of Michigan. Substitute notice consists of all of the following: (i) providing electronic notice to those residents for who the person or agency has electronic mail addresses; (ii) conspicuously posting the notice on their website; (iii) notifying major statewide media. The notice must include a telephone number or a website address that a person may use to obtain additional information and assistance.

Remediation Services:

N/A

Regulatory Notice:

N/A

Credit Reporting Agencies Notice:

If more than 1,000 residents of Michigan are notified of a breach, the person or agency shall notify each consumer reporting agency that compiles and maintains files on consumers on a nationwide basis of the security breach without unreasonable delay. The notification shall include the number of notices that the person or agency provided to residents of Michigan and the timing of those notices.

Third-Party Notice:

A person or agency that maintains a database that includes that that the person or agency does not own or license that discovers a breach of the security of the database shall provide a notice to the owner or licensor of the information of the security breach.

HIPAA:

A person or agency that is subject to and complies with HIPAA is considered to be in compliance with Michigan’s data breach notification statute.

Private Action:

N/A

Associated Regulations:

• Insurance Data Security (Mich. Comp. Laws §§ 500.550 - 500.565)
• Information Security Standard (Mich. Comp. Laws §§ 500.550 et seq.)

Highlights

Covered Entities: A licensed insurer or producer, and other persons licensed or required to be licensed, authorized, or registered, or holding or required to hold a certificate of authority under this act. Licensee does not include a purchasing group or a risk retention group chartered and licensed in a state other than Michigan or a person that is acting as an assuming insurer that is domiciled in another state or jurisdiction.

Security Standard: A licensee with 25 or more employees, including any independent contractors, must develop, implement, and maintain a comprehensive written information security program, based on the licensee’s risk assessment, that contains administrative, technical, and physical safeguards for the protection of nonpublic information and the licensee’s information system.

Consumer Notification: Unless the licensee determines that the cybersecurity event has not or is not likely to cause substantial loss or injury to, or result in identity theft with respect to, one (1) or more residents of Michigan, a licensee that owns or licenses data that are included in a database that discovers a cybersecurity event, or receives notice of a cybersecurity event, shall provide notice, without unreasonable delay, of the cybersecurity event to each Michigan resident if that resident’s unencrypted and unredacted personal information was accessed and acquired by an unauthorized person and/or that resident’s personal information was accessed and acquired in encrypted form by a licensee with unauthorized access to the encryption key.

Regulatory Notification: A licensee shall notify the Commissioner of the Michigan Department of Insurance and Financial Services as promptly as possible, but not later than 10 business days from a determination that a cybersecurity event involving nonpublic information that is in the possession of a licensee has occurred, when either of the criteria referenced below has been met.

Notification Timeline: As promptly as possible but not later than 10 business days from a determination that a cybersecurity event involving nonpublic information that is in the possession of a licensee has occurred.

Citations: MCL §§500.550-500.565

More Details

Definitions:

• Consumer: An individual, including, but not limited to, an applicant, a policyholder, an insured, a beneficiary, a claimant, and a certificate holder, who is a resident of this state and whose nonpublic information is in a licensee’s possession, custody, or control.
• Cybersecurity Event: An event that results in unauthorized access to and acquisition of, or disruption or misuse of, an information system or nonpublic information stored on an information system, not including an event resulting in the unauthorized acquisition of encrypted nonpublic information if the encryption, process, or key is not also acquired, released, or used without authorization or an event resulting in the unauthorized access to data by a person if the person acted in good faith in accessing the data and the access was related to activities of the person.
• Licensee: A licensed insurer or producer, and other persons licensed or required to be licensed, authorized, or registered, or holding or required to hold a certificate of authority under this act. Licensee does not include a purchasing group or a risk retention group chartered and licensed in a state other than Michigan or a person that is acting as an assuming insurer that is domiciled in another state or jurisdiction.
• Nonpublic Information: Electronic information that is not publicly available information and is any of the following:
  
  • Business-related information of a licensee, the tampering with which, or unauthorized disclosure, access, or use of which, would cause a material adverse impact to the business, operations, or security of the licensee.
  • Any information concerning a consumer that because of name, number, personal mark, or other identifier can be used to identify the consumer, in combination with any 1 or more of the following data elements:
    
    • Social Security number;
    • Driver license number or nondriver identification card number;
    • Financial account number, or credit or debit card number;
    • Any security code, access code, or password that would permit access to a consumer’s financial account; or
    • Biometric records.
  • 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 any of the following:
    
    • The past, present, or future physical, mental, or behavioral health or condition of any consumer or a member of the consumer’s family;
    • The provision of health care to any consumer; or
    • Payment for the provision of health care to any consumer.

Regulatory Notice:

A licensee shall notify the Commissioner of the Michigan Department of Insurance and Financial Services as promptly as possible, but not later than ten business days from a determination that a cybersecurity event involving nonpublic information has occurred, when either of the following criteria has been met:

• Michigan is the licensee’s state of domicile, for an insurer, or Michigan is the licensee’s home state, for an insurance producer as that term is defined in section 1201, and the cybersecurity event has a reasonable likelihood of materially harming a consumer residing in Michigan or any material part of the licensee’s operations.
• The licensee reasonably believes that the nonpublic information involves 250 or more consumers residing Michigan and the cybersecurity event is either:
  
  • A cybersecurity event impacting the licensee of which notice is required to be provided to any government body, self-regulatory agency, or other supervisory body under any state or federal law, or
  • A cybersecurity event that has a reasonable likelihood of materially harming either a consumer residing in Michigan or a material part of the licensee’s operations.

Content Requirements:

When notifying the Commissioner of the Michigan Department of Insurance and Financial Services of a cybersecurity event, a licensee shall provide as much of the following information as possible:

• The date of the cybersecurity event.
• A description of how the information was exposed, lost, stolen, or breached, including the specific roles and responsibilities of third-party service providers, if any.
• How the cybersecurity event was discovered.
• Whether any lost, stolen, or breached information has been recovered and, if so, how this was done.
• The identity of the source of the cybersecurity event.
• Whether the licensee has filed a police report or has notified any regulatory, government, or law enforcement agencies and, if so, when the notification was provided.
• A description of the specific types of information acquired without authorization. As used in this subdivision, “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.
• The period during which the information system was compromised by the cybersecurity event.
• 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 director and update this estimate with each subsequent report to the director under this section.
• 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.
• A description of efforts being undertaken to remediate the situation that permitted the cybersecurity event to occur.
• 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.
• The name of a contact person who is both familiar with the cybersecurity event and authorized to act for the licensee

Third-Party Notice Requirements:

If a licensee discovers that a cybersecurity incident in a system maintained by a third-party service provider, the licensee shall treat the event in the same manner for purposes of notification to the Commissioner of the Michigan Department of Insurance and Financial Services. The computation of the licensee’s deadlines begins 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 earlier.

Penalties:

A person that knowingly fails to provide a notice of a cybersecurity event required under this section may be ordered to pay a civil fine of not more than $250.00 for each failure to provide notice. The aggregate liability of a person for civil fines for multiple violations that arise from the same cybersecurity event must not exceed $750,000.00. The attorney general or a prosecuting attorney may bring an action to recover a civil fine under this section.

Credit Reporting Agencies Notice:

If a licensee provides notice to more than 1,000 Michigan residents, the licensee shall notify, without unreasonable delay, all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis.

Associated Regulations:

N/A

Highlights

Covered Entities: Applies to licensed insurers or producers, other persons licensed or required to be licensed, authorized, or registered, or holding a certificate of authority under state Insurance Code of 1956.

First Party Security Standard: 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, that contains administrative, technical, and physical safeguards for the protection of nonpublic information and the licensee's information system.

Third Party Security Standard: N/A

Disposal/Destruction Standard: N/A

Data Format: Electronic and Paper.

Citations: Mich. Comp. Laws §§ 500.550 et seq.

More Details

Definitions:

• Authorized individual: 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.
• Consumer: An individual, including, but not limited to, an applicant, a policyholder, an insured, a beneficiary, a claimant, and a certificate holder, who is a resident of this state and whose nonpublic information is in a licensee's possession, custody, or control.
• Cybersecurity event: An event that results in unauthorized access to and acquisition of, or disruption or misuse of, an information system or nonpublic information stored on an information system. Cybersecurity event does not include either of the following:
  
  • The unauthorized acquisition of encrypted nonpublic information if the encryption, process, or key is not also acquired, released, or used without authorization.
  • The unauthorized access to data by a person if the access meets both of the following criteria:
    
    • The person acted in good faith in accessing the data.
    • The access was related to activities of the person.
• Encrypted: The transformation of data into a form that results in a low probability of assigning meaning without the use of a protective process or key.
• Information security program: 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.
• Information system: A discrete set of electronic information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of electronic nonpublic information, as well as any specialized system such as an industrial or process controls system, a telephone switching and private branch exchange system, or an environmental control system.
• Licensee: A licensed insurer or producer, and other persons licensed or required to be licensed, authorized, or registered, or holding or required to hold a certificate of authority under this act. Licensee does not include a purchasing group or a risk retention group chartered and licensed in a state other than this state or a person that is acting as an assuming insurer that is domiciled in another state or jurisdiction.
• Multi-factor authentication: The authentication through verification of at least 2 of the following types of authentication factors:
  
  • Knowledge factors, such as a password
  • Possession factors, such as a token or text message on a mobile phone
  • Inherence factors, such as a biometric characteristic.
• Nonpublic information: The electronic information that is not publicly available information and is any of the following:
  
  • Business-related information of a licensee, the tampering with which, or unauthorized disclosure, access, or use of which, would cause a material adverse impact to the business, operations, or security of the licensee.
  • Any information concerning a consumer that because of name, number, personal mark, or other identifier can be used to identify the consumer, in combination with any one (1) or more of the following data elements:
    
    • Social Security number;
    • Driver license number or nondriver identification card number;
    • Financial account number, or credit or debit card number;
    • Any security code, access code, or password that would permit access to a consumer's financial account;
    • Biometric records
  • 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 any of the following:
    
    • The past, present, or future physical, mental, or behavioral health or condition of any consumer or a member of the consumer's family
    • The provision of health care to any consumer
    • Payment for the provision of health care to any consumer.
• Publicly available information: 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, by widely distributed media, or by disclosures to the general public that are required to be made by federal, state, or local law. A licensee has a reasonable basis to believe that information is lawfully made available to the general public if both of the following apply:
  
  • The licensee has taken steps to determine that the information is of the type that is available to the general public.
  • If an individual can direct that the information not be made available to the general public, that the licensee's consumer has not directed that the information not be made available to the general public.
• Risk assessment: The risk assessment that each licensee is required to conduct under section 555(3).
• Third-party service provider: A person that is not a licensee and that contracts with a licensee to maintain, process, or store, or otherwise is permitted access to nonpublic information, through its provision of services to the licensee.

Methods of Compliance:

Comprehensive Information Security Program Requirements:

A licensee's information security program must be designed to do all of the following:

• Protect the security and confidentiality of nonpublic information and the security of the information system;
• Protect against any threats or hazards to the security or integrity of nonpublic information and the information system;
• Protect against unauthorized access to or use of nonpublic information, and minimize the likelihood of harm to any consumer;
• Maintain policies and procedures for the secure disposal on a periodic basis of any nonpublic information that is no longer necessary for business operations or for other legitimate business purposes.

A licensee shall do all of the following:

• Designate one (1) or more employees, an affiliate, or an outside vendor to act on behalf of the licensee that is responsible for the information security program;
• Identify reasonably foreseeable internal or external threats that could result in unauthorized access, transmission, disclosure, misuse, alteration, or destruction of nonpublic information, including the security of information systems and nonpublic information that are accessible to, or held by, third-party service providers;
• Assess the likelihood and potential damage of these threats, taking into consideration the sensitivity of the nonpublic information;
• 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 all of the following:
  
  • Employee training and management;
  • Information systems, including network and software design, as well as information classification, governance, processing, storage, transmission, and disposal;
  • Detecting, preventing, and responding to attacks, intrusions, or other systems failures;
  • 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.

Risk Assessment Requirements:

A licensee must conduct a risk assessment pursuant to the statute. A licensee must:

• 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.
• Determine which of the following security measures are appropriate and implement those appropriate security measures:
  
  • Placing 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;
  • Identifying and managing 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;
  • Restricting physical access to nonpublic information to authorized individuals only;
  • Protecting 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;
  • Adopting secure development practices for in-house developed applications utilized by the licensee;
  • Adding procedures for evaluating, assessing, or testing the security of externally developed applications used by the licensee;
  • Modifying the information system in accordance with the licensee's information security program;
  • Using effective controls, which may include multi-factor authentication procedures for employees accessing nonpublic information;
  • Regularly testing and monitoring systems and procedures to detect actual and attempted attacks on, or intrusions into, information systems;
  • Including 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;
  • Implementing measures to protect against destruction, loss, or damage of nonpublic information due to environmental hazards, such as fire and water damage or other catastrophes or technological failures;
  • Developing, implementing, and maintaining procedures for the secure disposal of nonpublic information in any format.
• Include cybersecurity risks in the licensee's enterprise risk management process.
• 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.
• Provide its personnel with cybersecurity awareness training that is updated as necessary to reflect risks identified by the licensee in the risk assessment.

The statute imposes additional requirements and oversight obligations on a subject entity’s board of directors (where applicable).

Incident Response Plan Requirements:

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. An incident response plan must address all of the following areas:

• The internal process for responding to a cybersecurity event;
• The goals of the incident response plan;
• The definition of clear roles, responsibilities, and levels of decision-making authority;
• External and internal communications and information sharing;
• Identification of requirements for the remediation of any identified weaknesses in information systems and associated controls;
• Documentation and reporting regarding cybersecurity events and related incident response activities; and
• The evaluation and revision as necessary of the incident response plan following a cybersecurity event.

Exclusions:

• Health Care: A licensee subject to and in compliance with the Health Insurance Portability and Accountability of 1996 is exempt.
• Financial: N/A
• Other: A licensee that has fewer than 25 employees, including independent contractors, is exempt.

A licensee’s employee, agent, representative, or designee, who is also a licensee, is not required to comply with the statute, as long as the employee, agent, representative, or designee is covered by its licensee’s information security program.

Enforcement/Penalties:

The statute does not create a private right of action.

Government Notice:

All licensees are required to notify the Director as promptly as possible, but not later than 10 business days, after determining a cybersecurity event occurred involving nonpublic information.

By February 15 of each year, each insurer domiciled in this state shall submit to the director a written statement, certifying that the insurer is in compliance with the requirements of this section. Each insurer shall maintain for examination by the department all records, schedules, and data supporting this certificate for 5 years. 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 the areas, systems, or processes. The documentation described in this subsection must be available for inspection by the director.

Associated Regulations:

N/A