Massachusetts lawmakers are considering several privacy bills that insurers said they are concerned could hinder their underwriting capabilities.
A Joint Committee on Consumer Protection and Professional Licensure has held hearings on several measures dealing with personal record privacy with a focus on security breaches and consumers' ability to freeze access to records.
Michael Moran, American Insurance Association regional manager, said he expects the joint panel to vote the bills within ten days, at which time they will go to both the House of Representatives and Senate.
Eight bills are being examined (H. 213, H. 265, H. 291, H. 328, S. 161, S. 163, S. 208, and S. 232), but Mr. Moran said they will likely face consolidation in the next few days before final committee approval.
On the issue of security breach, the AIA wants to limit notification to consumers to data that is not protected through encryption or redaction.
John Murphy, AIA vice president, told the committee not all database breaches pose threats of identity theft. "Since redacted data is already truncated, it's not readily identifiable and therefore should not trigger a breach," he said.
He urged the lawmakers to consider recently passed California legislation that stresses that only unencrypted data be the subject of security breach notification.
"Since many companies operate in California and have complied with its requirements, following the California approach will foster uniformity and consistency in approach to privacy concerns," he said.
As for the security freeze portion of the bills, Mr. Murphy said that at minimum insurers should be able to treat a file as incomplete if they cannot get access to needed information because of the freeze.
Throughout the nation, the insurance industry has sought exemption from consumers' ability to place a freeze on data as a security measure to prevent identity theft. The insurers have voiced concerns that this could inhibit their claims and underwriting activities.
Mr. Murphy in addressing the committee urged lawmakers to establish a specific duration for any freeze and require reauthorization to continue beyond that point.
Mr. Moran said both the House and Senate meet year-round and that any legislation introduced this year could carry over into 2008.
Democrats control both chambers as well as the governor's office, but Mr. Moran declined to speculate on how or if the issue will play out along party lines.
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