While insurers skirmish with regulators over how privacy standards will look in states like Vermont and California, a powerful new twist to the issue is developing, according to an industry representative.
The ability of an insurer, credit agency or other business entity to use a consumer’s Social Security number is getting the attention of state attorneys general, according to Neil Alldredge, state relations manager, with the National Association of Mutual Insurance Companies in Indianapolis.
Often, use of a Social Security number is a “linchpin” in an insurers’ ability to operate, he says.
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If this trend–what Alldredge calls the “next phase” in the privacy issue–gains momentum, state agencies may not be able to release consumer information because data such as a driver’s license often is accessed by inputting a Social Security number, he says.
The Social Security number is a “national identity tool” that business has come to rely on, Alldredge says.
The issue should be determined by looking back to the intent of the Social Security Act, according to Kevin Hennosy, chairman and founder of SpreadtheRisk.org in Kansas City, Mo. A Social Security number should not be used for purposes other than Social Security, he adds.
“It is a dangerous number to have floating around,” being a critical number to all kinds of a consumer’s personal accounts, says Robert Hunter, who is with the Consumer Federation of America in Washington.
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 is moving through the Assembly. The bill could be voted into law by March 14, when the session ends.