Penalty Amount
$5,500,000
Consumers Affected
1,270,000
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.
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.
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.
Entity
Nationwide Insurance
Also known as: Nationwide
Industry
Insurance"Nationwide Insurance"
"the settlement calls on Nationwide to make a total payment of $5.5 million to the participating states"
"The states alleged that the October 2012 breach was caused by Nationwide’s failure to apply a critical security patch to its data system"
$18.0M
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$45.0M
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