The answer is the cloud service provider must sign a Business Associate Agreement (BAA). This is mandatory because HIPAA requires a written BAA for any CSP that creates, receives, maintains, or transmits electronic protected health information (ePHI) on behalf of a covered entity or business associate, establishing the CSP’s permitted uses and safeguarding obligations. On the Certified Cloud Security Professional (CCSP) exam, this tests your understanding of contractual compliance under HIPAA’s Privacy and Security Rules, often appearing as a distractor where options like “encryption at rest” or “annual audit rights” seem correct but are not the direct regulatory mandate. A common trap is confusing technical safeguards with the foundational legal requirement—without a signed BAA, no amount of encryption makes the arrangement lawful. Memory tip: think “BAA before data” to remember that the agreement must be in place before any ePHI touches the cloud.
CCSP Legal, Risk and Compliance Practice Question
This CCSP practice question tests your understanding of legal, risk and compliance. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company is migrating to the cloud and must comply with the Health Insurance Portability and Accountability Act (HIPAA). They plan to store electronic protected health information (ePHI) in a cloud database. Which of the following is a mandatory requirement for the cloud service agreement?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
The CSP must sign a Business Associate Agreement (BAA).
Under HIPAA, a covered entity or business associate must have a written Business Associate Agreement (BAA) with any cloud service provider (CSP) that creates, receives, maintains, or transmits electronic protected health information (ePHI) on their behalf. The BAA is a mandatory contractual requirement that establishes the CSP's permitted uses and disclosures of ePHI, as well as its obligations to safeguard the data. Without a signed BAA, the CSP cannot lawfully handle ePHI, making this the only option that is a direct regulatory mandate under HIPAA.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
The CSP must store data in a specific geographic location.
Why it's wrong here
HIPAA does not mandate geographic storage locations.
✗
The CSP must perform quarterly penetration tests.
Why it's wrong here
HIPAA does not specify frequency of penetration tests.
✗
The CSP must encrypt all data at rest using AES-256.
Why it's wrong here
Encryption is an addressable implementation specification, not a mandatory requirement.
✓
The CSP must sign a Business Associate Agreement (BAA).
Why this is correct
A BAA is required to ensure the CSP safeguards ePHI.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
ISC2 often tests the distinction between mandatory (required) and addressable (optional but must be documented if not implemented) specifications under HIPAA, leading candidates to incorrectly select encryption or testing frequency as mandatory requirements.
Detailed technical explanation
How to think about this question
The HIPAA Security Rule (45 CFR § 164.308) requires covered entities and business associates to have a written contract that meets the definition of a BAA (45 CFR § 160.103). The BAA must include specific provisions such as permitted uses, reporting of security incidents, and return or destruction of ePHI upon termination. In practice, cloud providers like AWS, Azure, and GCP offer pre-signed BAAs that customers must accept before storing ePHI, and failure to do so can result in HIPAA violation penalties up to $50,000 per violation.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A developer is choosing between AES-256 (symmetric) and RSA-2048 (asymmetric) for encrypting a large file that will be sent to a partner. Symmetric encryption is fast but requires key exchange; asymmetric is slower but solves the key distribution problem. A hybrid approach — encrypt the file with AES, encrypt the AES key with RSA — is standard. Questions like this test whether you understand when each approach applies.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Legal, Risk and Compliance — This question tests Legal, Risk and Compliance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: The CSP must sign a Business Associate Agreement (BAA). — Under HIPAA, a covered entity or business associate must have a written Business Associate Agreement (BAA) with any cloud service provider (CSP) that creates, receives, maintains, or transmits electronic protected health information (ePHI) on their behalf. The BAA is a mandatory contractual requirement that establishes the CSP's permitted uses and disclosures of ePHI, as well as its obligations to safeguard the data. Without a signed BAA, the CSP cannot lawfully handle ePHI, making this the only option that is a direct regulatory mandate under HIPAA.
What should I do if I get this CCSP question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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This CCSP practice question is part of Courseiva's free ISC2 certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CCSP exam.
Question Discussion
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