Many of you probably read earlier this month that California's Office of Administrative Law approved the California Department of Insurance's proposal to repeal certain privacy regulations. The California changes actually have greater significance than may be apparent on a quick glance. Although rarely noted in the media coverage, State insurance privacy regulations across the country (not just in California) find their roots in the federal Gramm Leach Bliley Act, so California's decision to make such changes provides a helpful illustration of the extraordinarily complex and confusing web of privacy regulation that governs even small organizations in this country. Also, California's move with respect to these changes contravenes the conventional wisdom that California is a renegade pro-consumer state when it comes to privacy regulation. Many of our followers have asked me to break down this newest California development, so here goes.
Many of us have watched over the past few years as dozens of proposed federal data security and breach notification bills have been introduced, often with bipartisan support, but have failed to become law. This year has seen many of the usual proposals. For those of you keeping track, this year's bills include: Rep. Rush's Data Accountability and Trust Act -- HR 2221; Sen. Leahy's Personal Data Privacy and Security Act - S. 1490; Sen. Feinstein's Data Breach Notification Act - S. 139; and Sens. Carper's and Bennett's "Data Security Act of 2010" - S. 3579. However, 2010 has also seen new and expansive proposals for broad and far-reaching data privacy legislation, including Rep. Boucher's "discussion draft" and Rep. Rush's "Building Effective Strategies to Promote Responsibility Accountability Choice Transparency Innovation Consumer Expectations and Safeguards" Act (or "BEST PRACTICES Act"). Most recently, on August 5, Sens. Pryor and Rockefeller introduced the "Data Security and Breach Notification Act of 2010" - S. 3742 (hereinafter "S. 3742" or the "Act"). S. 3742 is much more akin to the more traditional proposed breach notification and data security legislation mentioned above, and not nearly as ambitious as the draft Boucher Bill or the BEST PRACTICES Act. This post summarizes the key provisions in S. 3742.