Colorado Considers New Privacy and Data Breach Legislation

Colorado is the latest state to consider changing its privacy and data breach notification laws to improve protections for state residents. The legislation has been proposed by a bipartisan group of legislators, and if passed, would make considerable changes to existing state laws.

The proposed legislation applies to personally identifying information. The changes would see the following information included in the definition of PII:

Full name or last name and initial in combination with any of the following data elements: Personal ID numbers, Social Security numbers, state ID numbers, state or government driver’s license numbers, passport numbers, biometric data, passwords and pass codes, employment, student and military IDs, financial transaction devices, health information, and health insurance information.

Usernames/email addresses, financial account numbers, and credit/debit card numbers are also included, if they are compromised along with other information that allows account access or use. A breach would not be deemed to have occurred if the PII is encrypted, unless the key to unlock the encryption is also compromised.

Organizations that store the PII of state residents would be required to implement controls to ensure the privacy and confidentiality of PII. The proposed legislation does not include details of the types of security protections, procedures, and practices that must be implemented to keep personally identifiable information secure, only that the security measures be “appropriate to the nature of the personally identifying information and the nature and size of the business and its operations.”

Any entity that wishes to disclose PII to a third party must communicate to that entity that the PII must be protected and secured at all times, including the use of technology, procedures and practices. They must be appropriate to the sensitivity of the data and be reasonably designed to help protect the PII from unauthorized access, use, modification, disclosure, or destruction.

If PII is no longer required, the information must be securely and permanently destroyed, whether the information is in paper form or stored on electronic devices. Policies covering the destruction of data are required in writing.

For paper records, this would likely mean burning, pulping, pulverizing, or shredding. For electric devices, data would need to be securely erased to prevent reconstruction. Typical methods include degaussing – the exposure of the device to strong magnetic fields, the use of software to overwrite media to prevent reconstruction of data, or destroying the media by pulverization, disintegration, melting, shredding, or incineration.

In the event of a breach of PII, the maximum time limit for issuing notifications would be 45 days from the discovery of a breach. Currently there is no stipulated maximum time frame for issuing notifications. Notifications must currently be issued “in the most expedient time and without unreasonable delay.”

A notification would also need to be sent to the state attorney general no later than 7 days following the discovery of a breach that impacts 500 or more individuals.

As is the case in California and several other states, the legislation stipulates the content that must be included in the breach notification letters.  The date of the breach must be communicated, or a reasonable estimate if it is not known, a description of the PII that has been compromised, contact information, a toll-free number to call for further information, contact details of consumer reporting agencies and the FTC, and information on how credit freezes and security alerts can be set.

The legislation would also authorize the Colorado Attorney General to initiate criminal investigations and legal proceedings against organizations that fail to comply with the legislation

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.