While compliance with the Safeguards Rule helps in preventing breaches and ensuring data security, it does not necessarily exempt an entity from having to provide breach notifications as required by state laws. State breach notification laws typically have their own criteria for when notification is required, which may include factors like the type of data compromised, the potential risk of harm to individuals, and other circumstances surrounding the breach. While following the GLBA Safeguards Rule may demonstrate a commitment to data security, it doesn't automatically override the notification obligations imposed by state laws when a data breach occurs.
The answer is B. Exceptions include (1) encryption, (2) being in compliance with other GLBA, and (3) internal breach notification procedures compatible with state laws. Many state laws define a breach as "unauthorized access to" files, media, databases, etc. So access alone is not a sufficient excuse to be exempted from data breach notification.
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