Amended Massachusetts data protection act focuses on risk management

As Alexander Howard reported earlier today, the Massachusetts data protection law has been amended. The revised data privacy regulations — 201 CMR 17.00, “Standards for the Protection of Personal Information of Residents of the Commonwealth” — include several key updates. If you are an information security professional, take note of these changes, as they will likely have practical implications.

The most immediate impact is the provision for an additional 60 days to comply with the regulations. The deadline for implementation is now March 1, 2010.

Individuals and municipalities have expressly been removed from guideline jurisdiction, with a clarification that the “regulation applies to those engaged in commerce.” Guidelines on the requirement for a written information security plan are now simplified.

A new definition for the term service provider was added. The Office of Consumer Affairs and Business Regulation also amended third-party vendor rules. There is now a two-year grace period, relative to existing contracts, and requirements for those third parties to be in compliance.

Encryption requirements have been clarified. The apparently strict but, practically speaking, vague 128-bit specification from the prior version was replaced by “technology-neutral language.”

Further, a “technical feasibility” standard has been incorporated, acknowledging that methods to securely encrypt data on portable devices may not yet be available. Email encryption now falls under the technical feasibility standard. Additionally, encryption of backup tapes has been clarified to include prospective encryption. So you may safely cancel your firm’s plans to encrypt existing backup tapes. Encrypting new backup tapes will still be required, along with any personal data that travels over the public Internet or wireless network.

In another change that I believe will ultimately enhance consumer protection, 201 CMR 17.00 has been brought in line with certain federal regulations. Specifically, the Massachusetts data protection act now cedes authority to the Federal Trade Commission‘s (FTC) standards established under the Gramm-Leach Bliley Act (GLBA). GLBA utilizes a risk management approach to data security.

The patchwork of 44 different state health data protection laws has delayed electronic automation of, and therefore overall security for, health records. Adopting a federal standard, starting with the FTC’s risk-based approach to data protection, avoids this pitfall and may make widespread compliance both more feasible and more likely in the near future.

On one hand, a risk management approach should be familiar to IT professionals. It shifts resources from “check-the-box” controls that may or may not address a particular organization’s specific risks to controls that make more sense in context. On the other hand, given the concrete definition of the personal information in scope, it is difficult to see where risk management would not be present whenever such personal data is stored.

“Mandating every component of a program and requiring its adoption, regardless of size and the nature of the business and the amount of information that requires security, makes little sense in terms of consumer protection,” said Bradley MacDougall, of Associated Industries of Massachusetts. Risk management and assessment will afford more consumer protection by matching a given business’ actual risks with required security investments.