Facing up to the General Data Protection Regulation

Europe’s updated data protection rules, the General Data Protection Regulation or GDPR, become effective May 25 and could presage tougher regulation in other parts of the world.
By: | April 27, 2018 • 4 min read

On May 25 Europe adopts the General Data Protection Regulation (GDPR), a long-planned overhaul of how businesses collect and process data. The current regulations go back more than 20 years to a pre-Facebook era when the internet’s potential was still being explored, so the new set of data protection rules was overdue.

As Risk & Insurance® reported last year, the impact of the GDPR extends beyond the European Union. Once it takes effect it will affect not only companies across the EU’s member states, but any business or public sector organization that collects and processes data about its residents.

Failure to comply with it will result in heavy fines. In many European countries, according to Aon and DLA Piper, those fines appear to be uninsurable.

As HR departments are the guardians of large amounts of personal data, many have sought guidance on what steps they should be taking in preparation. This has produced an Amazon bestseller, The Little Book of GDPR, for Darren Wray, CEO of Fifth Step, who this week gave a market briefing for the International Underwriting Association (IUA) in London on what GDPR compliance entails.

Darren Wray, CEO, Fifth Step

Other parts of the world are also revamping their data protection rules; Australia, for example, introduced the Notifiable Data Breaches (NDB) scheme in February.

However, Wray suggested that GDPR could establish itself as the new template, meaning that the HR departments within U.S. companies would do well to become familiar with its requirements, if they haven’t already done so.

Facebook is evidently aware of the repercussions. The social networking giant is about to move 1.5 billion members in Africa, Asia, Australia and Latin America currently routed through its Ireland base to the U.S., to take advantage of the latter’s more lenient privacy laws.

While the advantage might prove temporary should consumer pressure mount for a U.S. equivalent of GDPR, Facebook’s caution is understandable.

The financial penalties imposed for breaching GDPR are the greater of 4 percent of the organization’s revenue or around $24.2 million (depending upon the exchange rate at the time of the fine).

The IUA briefing also referenced the massive data security breach suffered last fall by Equifax, which took the credit reference agency months to reveal and could eventually cost it $600 million or more.

However, Wray noted that “under GDPR, the company would no longer exist.” A mandatory post- breach period of 72 hours maximum will now apply to any company that becomes aware of any personal data breach.

More unexpected was the revelation that Equifax even derived some profit from last year’s episode by providing customers affected by the breach with a free three-month fraud protection service but then charging for it once that period had elapsed.

However, it may not yet be off the hook in the UK, where regulator the Financial Conduct Authority (FCA) is deciding whether the company violated the terms of its operating licence and if compensation to consumers is appropriate.

Dawn of the DPO

The lowdown for any business with European customers is that the GDPR isn’t optional. Companies will need to comply, regardless of their location.

It means obtaining the explicit consent, or opting-in, from any individual whose personal details they collect and process and ensuring that data is handled at all stages in a legally compliant way.

It also requires distinguishing between data protection — the risk of infringing an individual’s personal rights; and data security — the risk of it being lost, deleted or abused, while categorizing personal data as either sensitive or non-sensitive as the former requires higher protection and carries additional GDPR requirements.

The lowdown for any business with European customers is that the GDPR isn’t optional. Companies will need to comply, regardless of their location.

The new regulation also extends eight basic rights to each individual whose data is collected and processed by a company, such as the right to access a copy of the details being held on them.

They can also object to the company using their data; in some cases request erasure or ‘the right to be forgotten’ so that their data is deleted; and demand rectification where any of the personal data held is inaccurate or needs to be updated.

One that Wray foresees involving particular change is the right to data portability, enabling the individual to easily log on to the data being held about them, access a copy in standard format and use it, for example, when applying to a new insurer.

As a part of the organization that deals with large volumes of data — much of it sensitive — HR departments will be particularly susceptible to the tougher standards imposed by the GDPR. Their data lifecycles have an extended lifespan, ranging from when an individual is hired to their eventual transition to a retiree.

The new rules also promise bright career prospects for the data protection officer (DPO), whose role will be an essential one for any sizeable business. &

Graham Buck is a UK-based writer and has contributed to Risk & Insurance® since 1998. He can be reached at

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]