On June 5-6, 2023, the NAIC Privacy Protections (H) Working Group (“PPWG”) held an in-person interim meeting (“session”) to continue its work on drafting a new model privacy law, the Insurance Consumer Privacy Protection Model Law #674 (“Model Law”). Model Law #674 is intended to replace the current Models #670 and #672. The session was intended to be a drafting session focused on certain provisions of the current exposure draft not yet covered during the three preceding PPWG open drafting calls.
During the session, the working group covered third-party service providers, definitions of “insurance transactions” and “additional permitted transactions,” marketing (and joint-marketing agreements), consent to marketing (opt-in versus opt-out), and consumer privacy notices. The PPWG announced it intends to release a new exposure draft (version 1.0) of the Model Law by the end of June to address many of the comments the working group has received and discussed to date. There will be no 60-day comment period for this draft and instead, open calls to discuss drafting will restart once the new exposure draft is released.
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Our latest briefing dives into the public launch of the NIST’s long-awaited AI Risk Management Framework, the EEOC’s new plan to tackle AI-based discrimination in recruitment and hiring, and the New York Department of Financial Services’ endeavor to better understand the potential benefits and risks of AI and machine learning in the life insurance industry.
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In this edition of Faegre Drinker’s State Attorneys General Update, we discuss:
Arizona AG Enters $85 Million Settlement With Google for Alleged Improper Use of Consumer Location Data
Google agreed to an $85 million settlement for alleged violations of Arizona’s Consumer Fraud Act. Specifically, the Arizona AG alleged that Google violated the Act by building “coercive design tactics used to manipulate users’ behavior,” known as “dark patterns,” into its Android phone software. In this instance, the AG alleged that Google created misleading settings, so even if a consumer turned off location tracking in the “Location History” menu, location data would still be tracked and used to sell advertisements through other settings — specifically, the “Web & App Activity” menu.
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Our latest briefing explores the recent FTC commercial surveillance and data security forum (including discussion on widespread use of AI and algorithms in advertising), California’s inquiry into potentially discriminatory health care algorithms, and the recent California Department of Insurance workshop that could shape future rulemaking regarding the industry’s use of artificial intelligence, machine learning and algorithms.
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The National Institute of Standards and Technology (NIST) has released the second draft of its Artificial Intelligence (AI) Risk Management Framework (RMF) for comment. Comments are due by September 29, 2022.
NIST, part of the U.S. Department of Commerce, helps individuals and businesses of all sizes better understand, manage and reduce their respective “risk footprint.” Although the NIST AI RMF is a voluntary framework, it has the potential to impact legislation. NIST frameworks have previously served as basis for state and federal regulations, like the 2017 New York State Department of Financial Services Cybersecurity Regulation (23 NYCRR 500).
The AI RMF was designed and is intended for voluntary use to address potential risks in “the design, development, use and evaluation of AI products, services and systems.” NIST envisions the AI RMF to be a “living document” that will be updated regularly as technology and approaches to AI reliability to evolve and change over time.
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In February 2022, Executive Order 14024 highlighted that Russia’s invasion of Ukraine threatened not only Ukraine but also the national security and foreign policy of the United States. Pursuant to this executive order, and in the face of national security concerns, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has instituted extensive sanctions, including both economic and trade sanctions. Also, in response to the national security concerns, the Cybersecurity and Infrastructure Security Agency (CISA) issued a Shields Up notice, urging companies to bolster their cybersecurity to protect themselves against the threat of a cyberattack.
As the conflict between Russia and Ukraine continues, the threat of a cyberattack, specifically ransomware and NotPetya-style attacks, remains top of mind. However, as entities continue to bolster their cybersecurity and protect themselves against these attacks, they should be cognizant of the implications that OFAC sanctions may have in connection with such an attack.
Continue reading “Ransomware Payments Become an Even Riskier Choice Amidst the Ever-Growing Sanctions List”