When it comes to protecting the customers personal nonpublic information, like it or not, you are responsible. This is not another discussion about hackers and firewalls, for they are only part of the equation. Instead, this is about understanding the regulations states and the federal government are putting in place, why you are responsible, and how to ensure the stewardship of your customers personal nonpublic information.

These new regulations are being driven primarily by a flood of identity theft cases. One of the latest high-profile cases was announced last fall when a former help-desk employee of a credit-aggregating company was arrested for selling over 30,000 credit reports stolen through the three major credit-reporting firms. Confirmed damages currently are over $2.7 million, with more expected. While the lawsuits havent begun, you can bet attorneys are gearing up to sue everyone with pockets, deep or otherwise.

In response to consumer concerns, states have begun to establish new laws and/or regulations based on NAIC Model Regulation 673Standards for Safeguarding Customer Information. Up to now, 28 states have adopted or are about to adopt a form of this rule. Virtually every state will have some form of the regulation in place in the near future.