Tag Archives: Encryption

PCI Data Security Standards Council Provides Cloud Compliance Guidelines

On June 14, 2011, the PCI Security Standards Council’s Virtualization Special Interest Group published its “Information Supplement: PCI DSS Virtualization Guidelines”(the “Guidelines”) to Version 2.0 of the PCI Data Security Standard (“PCI DSS”).  The Guidelines provide context for the application of the PCI DSS to cloud and other virtual environments, and offer at least three critical reminders:

  • the PCI DSS applies to cloud environments without exception; 
  • critical analysis of the application of the PCI DSS to rapidly evolving cloud offerings is essential to compliance; and
  • cloud providers must be prepared to document and contract for necessary controls.

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German DPAs Publish Comprehensive FAQs on Statutory Data Breach Notification Requirement

The German Data Protection Authorities of Berlin and North Rhine-Westphalia have issued a paper containing Frequently Asked Questions about the German statutory data breach notification requirement that went into effect on September 1, 2009.  The paper provides detailed information on key questions concerning the procedure for notification as required by Section 42a of the German Federal Data Protection Act.

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French DPA Releases New Guidance on Personal Data Security

On October 7, 2010, the French Data Protection Authority (the “CNIL”) released its first comprehensive handbook on the security of personal data (the “Guidance”).  The Guidance follows the CNIL’s “10 tips for the security of your information system” issued on October 12, 2009, which were based on the CNIL’s July 21, 1981 recommendations regarding security measures applicable to information systems.

The Guidance reiterates that data controllers have an obligation under French law to take “useful precautions” given the nature of the data and the risks associated with processing the data, to ensure data security and, in particular, prevent any alteration or damage, or access by non-authorized third parties (Article 34 of the French Data Protection Act).  Failure to comply with this requirement is punishable by up to five years imprisonment or a fine of €300,000.

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Attorney General Launches New HIPAA Investigation

The Attorney General of Connecticut, Richard Blumenthal, is investigating an alleged breach of medical records at Griffin Hospital in Derby, Connecticut.  The hospital believes that a formerly affiliated radiologist gained unauthorized access to its digital Picture Archiving and Communications System (“PACS”), which stores patient information, including names, exam descriptions and medical record numbers.  In February, the hospital began receiving inquiries from patients who had been contacted by the radiologist to promote professional services offered at another medical facility.  In response to patient inquiries, the hospital conducted an internal investigation that revealed several instances of unauthorized access to the PACS system.  The hospital subsequently notified Attorney General Blumenthal.

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Connecticut AG Files First HITECH Act Suit

In a lawsuit he described as “[s]adly . . . historic,” Connecticut Attorney General Richard Blumenthal sued Health Net of Connecticut, Inc. for allegedly failing to secure private patient medical records and financial information involving hundreds of thousands of Connecticut enrollees and promptly notify consumers endangered by the security breach.  The case marks the first action by a state attorney general under the Health Information Technology for Economic and Clinical Health (“HITECH”) Act to enforce provisions of the Health Insurance Portability and Accountability Act (“HIPAA”).  The suit also alleges a violation of Connecticut’s breach notification statute.

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Nevada and New Hampshire Data Security and Privacy Laws Take Effect

On January 1, 2010, two important state data security and privacy laws took effect in Nevada and New Hampshire.  The laws create new obligations for most companies that do business in Nevada and for health care providers and business associates in New Hampshire.

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Germany Adopts Stricter Data Protection Law – Serious Impact on Business Compliance

On July 3, 2009, the German Federal Parliament passed comprehensive amendments to the Federal Data Protection Act (the "Federal Act"). These amendments also passed the Federal Council on July 10, 2009, and the revised law will enter into force on September 1, 2009. The new amendments cover a range of data protection-related issues, including marketing, security breach notification, service provider contracts and protections for employee data. They also include new powers for data protection authorities and provide for increased fines for violations of data protection law provisions.  To read more, click here.

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Nevada Updates Encryption Law and Mandates PCI DSS Compliance

As of January 1, 2010, Nevada law will require businesses to use encryption when data storage devices that contain personal information are moved beyond the physical or logical controls of the business, in addition to continuing to require that personal information be encrypted if it is transferred outside the secure system of the business. The new law repeals the existing Nevada encryption law, which will remain in effect until January 1, 2010. (For more information on the existing Nevada encryption law, please see our previous Client Alert.) The new law also mandates compliance with the Payment Card Industry Data Security Standard (“PCI DSS”) for businesses that accept payment cards. The law applies to organizations doing business in Nevada and provides that compliance will shield such businesses from liability for damages from a security breach.  To read more, click here.

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Liability for Data Security Auditors

A lawsuit that will soon commence in Arizona has the potential to alter the data breach liability landscape by making data security auditors liable for data breaches experienced by the companies they audit.  The case, Merrick Bank Corp. v. Savvis Inc., has its origins in events that began in 2003, when Merrick Bank (“Merrick”) offered to hire CardSystems Solutions (“CardSystems”) to process credit card transactions for its merchant customers.  The offer was contingent upon CardSystems achieving certification under VISA’s Cardholder Information Security Program (“CISP”), which is the predecessor to the Payment Card Industry Data Security Standard (“PCI DSS”).  Savvis audited CardSystems in 2004 and found that it had “implemented sufficient security solutions” and followed “industry best practices.”  VISA certified CardSystems shortly after receiving Savvis’ audit report.  In 2005, CardSystems revealed that it had experienced an information security breach that compromised forty million payment cards.

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