Court Rules
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SettlementHigh RiskMultistate

State AGs Settle with Nationwide for $5.5M Over Data Breach

Nationwide InsuranceAugust 9, 2017New Jersey Attorney General

Penalty Amount

$5,500,000

Consumers Affected

1,270,000

Summary

Nationwide Insurance settled a multi-state investigation into a 2012 data breach that exposed personal information of 1.27 million consumers due to failure to apply a security patch. The settlement requires enhanced security practices, hiring a Technology Officer, and a $5.5 million payment to the states.

Remedy

Nationwide must update security practices, hire a Technology Officer to manage security updates, strengthen security over three years, disclose data retention practices to consumers, and pay $5.5 million.

InjunctionCompliance ProgramCorrective NoticeMonetary Penalty

Contract Impact

In-house legal teams should review customer and prospective customer agreements, as well as vendor contracts involving data processing, to ensure alignment with the settlement requirements. Key clauses to examine include data security standards, patch management obligations, data retention policies, and breach notification procedures. Changes may be needed to mandate timely application of security patches, require explicit disclosure about retaining personal information of non-customers, enforce prompt breach reporting, and include provisions for appointing a dedicated Technology Officer to oversee software and application security updates.

Contract Search Terms

security patch compliancedata retention disclosurebreach notification clausetechnology officer requirementsoftware update managementprospective customer data handlingdata security standards

Violation Types

Entity Details

Entity

Nationwide Insurance

Also known as: Nationwide

Industry

Insurance

Multistate Coalition

Official Sources

Source Evidence

Entity Name
"Nationwide Insurance"
Fine Amount
"the settlement calls on Nationwide to make a total payment of $5.5 million to the participating states"
Violation Types
"The states alleged that the October 2012 breach was caused by Nationwide’s failure to apply a critical security patch to its data system"

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