By Alan D. Meneghetti, Esq. of Locke Lord LLP The General Data Protection Regulation (GDPR or Regulation) has been approved by European Union (EU) members as well as the Council of Europe and, at the time of writing, the draft Regulation is before the European Parliament for consideration and approval. Work has already begun to be ready for 2018 implementation. The Regulation strives for common data protections in all EU countries. With this two year phase-in period and with much to be done, those in the insurance industry that collect personal data (or PII) in or from individuals in the EU should begin preparing now for the increased data compliance requirements, which will become mandatory as soon as the GDPR takes effect. Key Features of the GDPR Post the ECJ Safe Harbor case (Maximillian Schrems v Data Protection Commissioner, Case C-362/14, 6 October 2015), the GDPR will maintain the general prohibition of data transfers to non-EU countries that are not officially recognised as having an aEUR~adequateaEUR(TM) level of protection by the EU, but current systems are to be kept intact until repealed. At this stage, the validity of using model contract clauses and binding corporate rules (or BCRaEUR(TM)s) to transfer personal data outside the European Economic Area (EEA) remain valid (see Arts. 40-42 of the GDPR). However, the EU Article 29 Working Party (a policy body made up of the national heads of data protection authorities in EU countries) has also indicated in very recent announcements that they have concerns regarding the appropriateness of model clauses and binding corporate rules for transfers to the U.S., and will be reassessing those mechanisms in light of a new proposed Safe Harbor approach (the Privacy Shield framework) once it is released. Thus, while they made clear that businesses may rely on model clauses and binding corporate rules in the interim, that issue will be subject to review, the results of which are expected shortly. Indeed, it is fair to say that the Privacy Shield itself, as well as the model clauses and binding corporate rules, are susceptible to a legal challenge to their ability to afford an adequate level of protection for the transfer of personal data outside of the EEA (in much the same way that Maximillian Schrems, a privacy activist, challenged the adequacy of the first Safe Harbor framework). Scope U.S. and other non-EU insurers will be subject to the Regulation if they underwrite risks for or issue policies to individuals and companies located within the EU, or if they monitor individualsaEUR(TM) behaviour which takes place within the EU. For example, an insurer who collects data of EU insureds using cookies will likely be subject to the Regulation. This is a key change from the current regulatory scheme and will likely mean that many more international companies and insurers will be subject to the EU data protection regime. aEURoeOne Stop ShopaEUR? The GDPR aims to create a so-called aEURoeone stop shopaEUR? for regulatory approvals and the regulation of multi-state processing. Where a companyaEUR(TM)s processing activity affects data subjects in more than one Member State in the EU, the country where the bulk of the data processing takes place will act as a aEURoelead supervisory authorityaEUR? and will be primarily responsible for regulating that particular activity across the EU. Data Impact Assessments Companies will, in certain circumstances, need to carry out systemic and extensive data impact assessments, especially if the data processing is regarded as aEURoehigh riskaEUR?. Data processing is generally regarded as aEURoehigh riskaEUR? if it involves sensitive personal data or its uses are more intrusive, both features which are often (although not always) the case when it comes to personal data held by insurers Consultation with the authorities may be required in such aEURoehigh riskaEUR? circumstances. Whether these reviews will be akin to data audits or cyber or data risk assessments in the U.S. is not yet clear. Data protection officers, as described below, will be responsible for this task. Data Protection Officers Entities with certain types of data or data activities will have to appoint a data protection officer (DPO), reporting to senior management. DPOs will be required for businesses with core activities that, by virtue of their nature, scope or purposes, require regular and systematic monitoring of data subjects on a large scale; or processing on a large scale of special categories of data (essentially, personal data and sensitive personal data, or data relating to criminal convictions and offences). This may refer to processing which (in the words of Recital 71 to the GDPR) aims at aEURoea considerable amount of personal data at regional, national or supranational level and which could affect a large number of data subjects and which are likely to result in a high risk, for example, on account of their sensitivity, where in accordance with the achieved state of technological knowledge a new technology is used on a large scale as well as to other processing operations which result in a high risk for the rights and freedoms of data subjects, in particular where those operations render it more difficult for data subjects to exercise their rights.aEUR?