HB 2690
Initials PRB Page 1 Commerce
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-fifth Legislature
Second Regular Session
HB 2690: cybersecurity risk; insurance
Sponsor: Representative Weninger, LD 17
Committee on Commerce
Overview
Directs the Arizona Department of Administration (ADOA) to obtain insurance for security system
and data breaches. Establishes the Cyber Risk Insurance Fund (Fund).
History
ADOA is required to, the extent it is deemed necessary, provide insurance on the following:
1) All State-owned buildings;
2) Contents in any building owned, leased or rented to or by the state;
3) This state and its departments, agencies, boards and commissions and all officers of these
entities as well as provide insurance for actions and omissions by these entities when
acting in authorized governmental actions;
4) All personal property reported to ADOA that is under the clear responsibility of this state
because of written leases or other written agreements;
5) This state and its departments, agencies, boards and commissions against casualty, use
and occupancy and liability losses;
6) Workers' compensation and employers' liability insurance;
7) Design and construction of buildings, roads, environmental remediations and other
construction projects; and
8) Other exposures to loss where insurance may be required to protect this state and its
departments, agencies, boards and commissions and for all officers, agents and
employees acting in the course and scope of employment or authorization (A.R.S. § 41-
621).
ADOA may also determine that self-insurance is necessary or desirable and, if it is decided to be,
ADOA will provide for the state self-insurance for losses arising out of state property, liability or
workers' compensation claims. The Director of ADOA may impose on state departments,
agencies, boards and commissions a deductible for each loss that arises out of a property, liability
or workers' compensation loss (A.R.S. § 41-621). Each year ADOA is required to provide a report
to the Legislature on actuarial needs due to liability losses, workers compensation liability losses
and property losses by September 1 (A.R.S. § 41-622).
Provisions
1. Requires ADOA to obtain insurance, or self-insure, on losses caused by data breaches,
security system breaches and security incidents for select boards, agencies and
commissions. (Sec. 1)
2. Allows ADOA, if self-insured, to apply a deductible for losses due to actual or suspected data
breaches, security system breaches or security incidents. (Sec. 1)
3. Establishes the Fund within ADOA. (Sec. 2)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note HB 2690
Initials PRB Page 2 Commerce
4. Requires ADOA to include the actuarial needs for replenishment of the Fund in the agency's
annual budget request. (Sec. 2)
5. Specifies interest on any judgment against the state paid out for the Fund accrues at the
average yield offered by U.S. Treasury bills. (Sec. 2)
6. Specifies the Fund monies are exempt from lapsing of appropriation and are continuously
appropriated. (Sec. 2)
7. Defines pertinent terms. (Sec. 1)
8. Makes technical and conforming changes. (Sec. 1, 2)