U.S. South Carolina Insurance Data Security Act

Why it Matters

The South Carolina Insurance Data Security Act establishes a clearframework to help insurers protect sensitive information anddemonstrate regulatory compliance.

Key benefits include:

• Strengthen data security controls

Implement robustsecurity measures to better safeguard policyholder information fromunauthorized access, loss, or misuse.

• Enhance regulatory compliance

Alignorganizational practices with state-mandated requirements, supportingcompliance efforts and reducing the risk of regulatory penalties.

• Improve incident response readiness

Require timelydetection of and response to security events, minimizing the impactof data breaches or cyber incidents.

• Increase accountability and oversight

Promote essentialroles and documented policies that clarify organizationalresponsibilities for information security and risk management.

• Promote third-party risk management

Mandateevaluation and oversight of vendor security practices, reducingexposure to risks from external service providers.

How it Works

The U.S. South Carolina Insurance Data Security Act establishes aregulatory framework consisting of a set of security requirements,governance obligations, and incident response provisions for licensedinsurers operating within South Carolina. The Act structures itsrequirements around risk management processes, mandatory securitysafeguards, periodic risk assessments, and formal incidentnotification procedures. By clearly defining standards for theprotection of nonpublic information within the insurance sector, theAct aligns with recognized security practices and regulatoryexpectations.

Organizations operationalize the requirements of the South CarolinaInsurance Data Security Act by implementing security controls acrosstheir information systems, conducting annual risk assessments toidentify and address vulnerabilities, and adopting formal policies tomanage cybersecurity risks. Regular compliance assessments andongoing security monitoring are key activities, as are theestablishment of incident response processes to ensure timelynotification to regulators in the event of a qualifying breach. Theseoperational practices help organizations maintain compliance whilestrengthening their overall security posture.

Using SmartSuite, organizations can operationalize the Act byleveraging control libraries to map statutory requirements,maintaining risk registers to document threats and mitigationactivities, and supporting policy governance through centralizeddocumentation. SmartSuite enables evidence collection for compliancetracking, organizes remediation workflows to address deficiencies,and provides dashboards for audit readiness and reporting, helpingorganizations automate and streamline ongoing compliance with theSouth Carolina Insurance Data Security Act.

Key Elements

• Information Security Program Structure

Establishesrequirements for insurers to develop and maintain a writteninformation security program tailored to company risk.

• Risk Assessment Procedures

Specifiesprocesses for regular evaluation and identification of reasonablyforeseeable internal and external security threats.

• Third-Party Service Provider Oversight

Outlinesexpectations for the due diligence and monitoring of vendors handlingnonpublic information.

• Incident Response Planning

Describesnecessary components of an incident response plan to addresscybersecurity events and mitigate impact.

• Regulatory Reporting Protocols

Defines steps fornotifying the insurance commissioner of cybersecurity eventsaffecting South Carolina residents.

• Annual Certification and Documentation

Requires boardsof directors or senior management to certify compliance and maintainsupporting documentation for inspection.

• Data Protection Measures

Enumeratesadministrative, technical, and physical safeguards to protectnonpublic information and mitigate data breach risks.

Framework Scope

The U.S. South Carolina Insurance Data Security Act is adopted byinsurance licensees, agencies, and companies managing consumer andpolicyholder information. It governs the protection of nonpublicpersonal data and related information systems, typically enforcedwhen meeting state cybersecurity compliance, mitigating databreaches, and supporting insurance sector assurance programs.

Framework Objectives

The South Carolina Insurance Data Security Act sets out comprehensiveobjectives for safeguarding sensitive insurance data and managingcybersecurity risk.

Protect nonpublic information through effective data protection andsecurity controls

Strengthen governance and oversight of information security riskmanagement programs

Establish a formalized approach to cybersecurity compliance withinregulated entities

Enhance operational resilience against emerging cyber threats andincidents

Ensure organizations can demonstrate ongoing compliance and auditreadiness

Promote accountability for safeguarding consumer information withinthe insurance sector The South Carolina Insurance Data Security Actaligns closely with frameworks like the NAIC Insurance Data SecurityModel Law and NIST Cybersecurity Framework. Insurers typicallyimplement this act to achieve regulatory compliance, particularlywhen handling nonpublic information and reporting security incidentsto regulators within the state insurance sector.

Framework in Context

The South CarolinaInsurance Data Security Act aligns closely with frameworks like theNAIC Insurance Data Security Model Law and NIST CybersecurityFramework. Insurers typically implement this act to achieveregulatory compliance, particularly when handling nonpublicinformation and reporting security incidents to regulators within thestate insurance sector.

Common Framework Mappings

Organizations often map the South Carolina Insurance Data SecurityAct to other recognized cybersecurity frameworks to streamlinecompliance, ensure comprehensive security controls, and satisfyoverlapping regulatory and industry requirements.

Mapped frameworks include:

CIS Controls

COBIT

GLBA

HIPAA

ISO/IEC 27001

ISO/IEC 27002

NIST Cybersecurity Framework

NIST SP 800-53

PCI DSS

SOC 2

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