SS's May Be The Next Privacy Debate

By Jim Connolly

NU Online News Service, Feb. 27, 2:39 p.m.EST?The next privacy battle for insurers will involvestate attorneys general seeking to curtail their ability to makeuse of a consumer's Social Security number information, accordingto an insurer's representative.

Neil Alldredge, state relations manager, with the NationalAssociation of Mutual Insurance Companies in Indianapolis suggestedthe focus by state officials could become a critical issue forinsurers for whom the use of a Social Security number is a"lynchpin" in their ability to operate.

If the trend gains momentum, state agencies may not be able torelease consumer information because information such as a driver'slicense often is accessed by inputting a Social Security number,Mr. Alldredge adds. This is the "next phase" in the privacy issue,he said. The Social Security number is a "national identity tool"that business has come to rely on, Mr. Alldredge said.

The issue should be determined by looking back to the intent ofthe Social Security Act, according to Kevin Hennosy, chairman andfounder of SpreadtheRisk.org in Kansas City, Mo. A Social Securitynumber should not be used for purposes other than Social Security,he added.

"It is a dangerous number to have floating around," said RobertHunter, a consumer advocate with the Consumer Federation of Americain Washington. It is a critical number to all kinds of a consumer'spersonal accounts, he noted.

Indiana is one state where this new issue is being advanced.Indiana Attorney General Steve Carter is supporting a privacy bill,Indiana SB 376, that has passed out of the state Senate and ismoving through the Assembly. The bill could be voted into law byMarch 14, when the session ends.

The measure would bar release of a social security number toinsurers and others in the public sector unless a court order isobtained or a federal statute requires its dissemination.

Attorneys general's interest in privacy regulation currently hasthem tracking how privacy standards are being implemented toconform with GLBA. A letter sent in mid-February by 46 attorneysgeneral to the Federal Trade Commission made recommendations on howprivacy notices should be implemented in the future.

The attorneys general are recommending short, standard forms.They wrote that "it is clear that millions of consumers did notread or understand the dense text and long discussion contained inthousands of privacy notices developed by financial institutionsprior to the initial July 1, 2001, deadline."

They cite the low opt-out rate, less than 5 percent, to formssent out to meet a July 1, 2001, deadline. An opt-out is a requestby a consumer that nonpublic personal information not be used.

Icons or a format similar to a food label developed by the Foodand Drug Administration to signify different consumer preferenceson privacy are being advocated by the attorneys general.

Indeed, the attorneys general argued in their letter thatconsistency will cut down on compliance costs and enhancecompetition by making comparisons easier.