Saying that it would have impeded communication between consumers and their insurers, Maryland's Gov. Bob Ehrlich has vetoed a bill that was drafted to combat identity theft by protecting social security numbers.

Senate Bill 117 would have prohibited anyone other than a unit of state or local government from posting or displaying social security numbers. It also banned printing social security numbers on cards required for products or services, and requiring transmission of social security number over the Internet without a secure connection and encryption protection.

“Gov. Ehrlich has taken a very deliberate and thoughtful approach to this issue and has correctly concluded that banning insurers from using e-mail and fax transmissions is not the best way to protect or serve Maryland's consumers,” said Tammy Velasquez, assistant vice president, mid-Atlantic region, for the American Insurance Association.

In a message addressed to the state senate president, the governor applauded the security goals of the legislation. “Widespread use of social security numbers for identification has created a society subject to a proliferation of identity theft crimes,” he acknowleged. The section of the bill which caused him concern, however, would have made it more difficult for consumers to transact businesses with their insurers. “An insurer can only include an individual's social security number in documents sent by mail,” he explained. “Insurers are specifically prohibited from using electronic mail (even if there is a secure connection and the SSN is encrypted) and facsimile transmissions.”

The governor pointed to the difficulties that servicemen and women would have dealing with their insurers. “Prohibiting the use of a social security number for identification via e-mail or facsimile will substantially inconvenience military personnel, who often are deployed in areas where traditional mail is not timely,” said Ehrlich. “Often, the processing of an application is time-sensitive for these individuals who are deployed in the service of their country.”

He also raised the issue of duplicate names, noting that, among its policyholders, USAA counted 1,800 men named David Johnson.

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