Are you using the phone encryption option in the settings? Then probably the system would be notifying you that there is still a way someone else can access your data via the SD card thereby asking you to encrypt the SD card too. I am not sure about it but i have been using my phone for 6 months now and not even once it popped a notification on Encryption(neither the phone nor the SD card).
If that is the case, then decrypt your phone and see if the System still throws you the notification.
On the " SD card usage is restricted due to security policy " issue, It is actually a new restriction with Kitkat. Third party apps can only access SD card data but can't modify or write to SD card data (in simple, according to Third party apps, SD card is a read-only device). In this case, you can use File Commander (file manager) or other System apps(like album, movies, walkman,etc.) present in the system to work around with data on SD card. if you want to modify the data with Third party apps, then copy the file to internal memory, then Third party apps can access and modify it.
Permanent Solution: If you have root-access, then i guess there is a mod in the forums that removes this restriction.
Hope it helped.
Phone: Xperia Z1(C6902)