Montana State Auditor Mark O’Keefe and SAFECO Regional Vice-President Bill Norman are working together to resolve issues raised by a recent SAFECO mailing in response to the amendments to the Montana Insurance Information and Privacy Protection Act.
The mailing from SAFECO to its Montana policyholders in response to the Act asked them to sign a form allowing SAFECO to continue collecting personal information in connection with routine insurance transactions.
“We have received hundreds of calls from consumers who were upset with the company’s letter,” said O’Keefe. In its letter, SAFECO said that if the authorization form was not signed, SAFECO may discontinue a customer’s coverage.
“SAFECO has worked with us in good faith to come to an acceptable solution that addresses the concerns of Montana policyholders that their coverage might be cancelled as a result of this,” he noted.
O’Keefe proposed legislation that was signed into law by the 1999 legislature that increased protections of a person’s private information. The legislation also required insurers to obtain permission from their customers before they collect any personal, identifiable information on new, current, or prospective clients.
“The key to the legislation is that any information used has to pertain to insurance purposes, and that the information, once obtained, cannot be sold or disseminated without permission,” he said.
O’Keefe noted that insurers have been able to collect and sell all such information in the past before this legislation was passed. He said the new law places limits on what insurance companies can do with that information by:
1. Requiring insurance companies to obtain permission from the consumer prior to collecting the information.
2. Requiring insurance companies to obtain permission from the consumer to disseminate the information to third parties
. 3. Prohibiting insurance companies from selling the information to telemarketers, personal data banks, or any other entity not related to insurance, unless the consumer separately authorizes such a transaction.
SAFECO was one of the first companies operating in Montana to ask for policyholders’ permission and O’Keefe said that he was pleased to see SAFECO acting to comply with the law. “On the other hand, people reading SAFECO’s letter and the accompanying form thought they were signing their life away,” said O’Keefe. “It appeared that there were no limitations on what information could be collected or disseminated.”
O’Keefe said discussions between his office and SAFECO have been productive, and that SAFECO has already started clarifying exactly what kind of information they collect, what they use it for, and assuring their customers that they have absolutely no intent to market the information to third parties without their permission. SAFECO’s Norman said that if consumers are not comfortable with the form and choose not to sign it at this time, SAFECO would not take negative action against consumers
. If in the future, however, they need to collect or share information relating to a policy, they would need to obtain a signature authorizing it.
“The message delivered by our disclosure form was an attempt to conform to the requirements of the new law,” said Norman. “We always put our customer’s interests first and hope that the law will be modified to allow a more user friendly interaction between insurance companies, their agents and customers.”
The State Auditors Office has recommended that all other insurance companies doing business in the market refrain from issuing any other open-ended authorizations. O’Keefe said he will establish a working group consisting of members of the industry, Montana consumers and officials from his office to allow all parties input on the language that should be used in such forms.
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