Delaware Updates Data Breach Notification Obligations

by Morgan Lewis
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Morgan Lewis

On August 17, 2017, Delaware Governor John Carney signed into law an act to amend Title 6 of the Delaware Code relating to breaches of security involving personal information. The amended law and the new obligations it imposes go into effect on April 14, 2018. The amended law tightens the notice requirements in the case of a breach or potential breach and narrows the scope of protection offered by safe harbor provisions previously available.

Material Changes Under the Amended Law

The amended law requires that any person (individual or entity) who conducts business in Delaware “implement and maintain reasonable procedures and practices” to prevent unauthorized access, use, or destruction of personal information that such person owns, licenses, or maintains as collected or maintained in the regular course of business. Previously, there was no such requirement to maintain preventive procedures and practices.

The defined term under the existing law “breach of security of the system” has been replaced with “breach of security,” which is defined as the unauthorized acquisition of computerized data that compromises the security, confidentiality, or integrity of personal information.

“Breach of security” does not include

  • the good-faith acquisition of personal information by an employee or agent of any person for the purposes of such person provided the personal information is not used for an unauthorized purpose or subject to further unauthorized disclosure, or
  • the unauthorized acquisition of personal information to the extent it is encrypted, unless such unauthorized acquisition includes, or is reasonably believed to include, the encryption key and there is reasonable belief that the encryption key could render the personal information readable or useable.

The definition of “personal information” has been updated and shall, under the amended law, consist of a combination of the following pieces of information, provided that (1) either piece of information is unencrypted and (2) it is not information lawfully made publicly available from federal, state, or local government records or widely distributed media:

  • A Delaware resident's first name or first initial and last name; and
  • One or more of the following data elements:
    • Social Security number
    • Driver's license number or state or federal identification card number
    • Account number, credit card number, or debit card number in combination with any required security code, access code, or password permitting access to a resident's financial account
    • Passport number
    • Username or email address in combination with a password or security question and answer permitting access to an online account
    • Medical history, medical treatment by a healthcare professional, diagnosis of a mental or physical condition by a healthcare professional, or deoxyribonucleic acid profile
    • Health insurance policy number, subscriber identification number, or any other unique identifier used by a health insurer to identify the person;
    • Unique biometric data generated from measurements or analysis of human body characteristics for authentication purposes
    • Individual taxpayer identification number

Notice Requirements

Upon the determination of the breach of security (defined as the point in time when the person who owns, licenses, or maintains computerized data has sufficient evidence to conclude that a breach of security has taken place), such person shall give notice to any resident of Delaware whose personal information was breached or is reasonably believed to have been breached, unless, after an appropriate investigation, the person reasonably determines that the breach of security is unlikely to result in harm to the individuals whose personal information has been breached.

Such notice shall not be unreasonably delayed and must be given no later than 60 days after the determination of the breach of security except if

  • a shorter time is required under federal law;
  • a law enforcement agency determines that the notice will impede a criminal investigation and requests that notice be delayed. Such delayed notice must be made after the agency determines that notice will not compromise the criminal investigation and notifies the person of such determination; or
  • a person otherwise required to provide notice hereunder could not, through reasonable diligence, identify within 60 days that the personal information of certain Delaware residents was included in a breach of security, then notice is required to such residents as soon as practicable after the determination that the breach of security included the personal information of such residents, unless such person provides or has provided substitute notice.

If a person maintains computerized data that includes personal information but does not own or license such computerized data, that person shall give notice to and cooperate with the owner or licensee of the information of any breach of security immediately following determination of the breach of security. “Cooperation” includes sharing with the owner or licensee information relevant to the breach.

If more than 500 Delaware residents are required to be notified, the person required to provide notice shall also provide notice to the Delaware attorney general, no later than when such notice is provided to the residents.

If the breach of security includes the breach or the reasonable belief of a breach of a social security number, the person shall offer to such affected resident credit monitoring services at no cost for a period of one year, and provide information necessary for enrollment in such services and how such resident can place a credit freeze on such resident’s credit file.

Such credit monitoring services are not required if, after an appropriate investigation, the person reasonably determines that the breach of security is unlikely to result in harm to the individuals whose personal information has been breached.

If a breach of security involves the login credentials of an email account, then the security breach notification to such email address is not sufficient, and notice must be given by another method, including by clear and conspicuous notice delivered to the resident online when the resident is connected to the online account from an Internet Protocol address or online location from which the person knows the resident customarily accesses the account.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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