Legislature(2005 - 2006)BUTROVICH 205
02/28/2006 08:30 AM JUDICIARY
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* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 222-PROTECTION OF PERSONAL INFORMATION CHAIR RALPH SEEKINS announced SB 222 to be up for consideration. 8:39:54 AM JOHN GEORGE, American Council of Life Insurers, informed the committee that life insurance policies follow a person all around the country unlike automobile or homeowners insurance policies. Once a person dies, the company must ensure proper identification in order to finish the business that the policy dictates and a social security number is an ideal method of identification. He said the restrictions posed in SB 222 would not work for life insurance companies. 8:42:39 AM MR. GEORGE said SB 222 would impair the ability of life insurance companies to do business. He recommended carving out life insurance companies so that they would not apply to the bill since they already are controlled extensively by regulations. 8:44:05 AM SENATOR HOLLIS FRENCH asked the reason that life insurance institutions have not moved forward to more sophisticated methods of identification other than a social security number, such as fingerprinting or retinal scans. MR. GEORGE responded it would not be practical or convenient to do so. A social security number follows a person throughout their life and insurance companies require it when they pay out regardless. 8:45:44 AM SENATOR GENE THERRIAULT said it was not the intent of the sponsors to limit internal use of the social security number. MR. GEORGE agreed the bill does not specifically state that a company could not use the social security number internally but questioned whether the bill would allow it. 8:47:37 AM MR. JOHN BURTON testified that he was representing Choice Point, a data information company that provides information and verification to a cross section of the economy, such as financial institutions, insurance companies, banks, local law enforcement and state and federal government agencies. He highlighted Section 45.48.800 in the bill and said Choice Point opposes any regulation or prohibition on consumer credit information. He said credit header data is a consumer's name, address, social security number and date of birth. They do not contain credit information. 8:50:12 AM MR. BURTON continued saying credit header data is the backbone of a database that Choice Point provides to financial institutions and others for fraud prevention, tips and leads for locating people, and for US Patriot Act compliance. He said no state today has restrictions on credit header data because federal law already regulates it. He believes SB 222 to be unnecessary legislation. 8:52:43 AM MR. BURTON added his next concern regards restriction on social security numbers and the use of them. Section 45.48.500 appears to mirror California law on social security access. Choice Point has no objection over California law but they have problems with paragraph (6)(b), which he said relates back to credit header data. 8:54:23 AM Financial institutions, law enforcement, banks, and insurance companies facilitate thousands of transactions daily. The economy is built on the ready and regulatory flow of information from business to business. A social security number is a unique form of identification and if it weren't a social security number, it would be some other form of identification and the issue would be the same. He said he could not imagine a scenario where a bank would have to secure permission to utilize a person's social security number for identification and fraud prevention purposes for every single transaction. 8:56:11 AM SENATOR THERRIAULT said banks do not use social security numbers in order to cash checks or do regular business. He asked Mr. Burton the reason for using the bank example. MR. BURTON agreed that his comments should be more directed toward the overreaching fraud prevention and verification services that Choice Point provides. He said the social security number still remains the most accurate and reliable method of identification. 8:58:18 AM SENATOR FRENCH asked Mr. Burton whether California had a provision like (6)(b). MR. BURTON did not know. SENATOR FRENCH asked what the effect would be for passing that provision as far as common banking transactions. MR. BURTON said every single transaction would require consent and that would seriously slow down the ability to do business. 9:00:30 AM SENATOR FRENCH suggested it would be just one more piece of paper to sign when setting up an account. MR. BURTON asserted it would place a tremendous burden on everyone involved. He spoke briefly about his concern of ensuring the legislative intent of the bill. He added his opinion that some definitional changes need to be made before the bill is passed out. 9:04:12 AM ED SNIFFEN, Assistant Attorney General, Department of Law (DOL) testified the DOL supports the efforts to curb identity theft. He expressed concern over Article 1 and noted it does not provide a requirement for state government to comply with the terms of the bill. He said it is imperative for state agencies to take extreme caution to protect personal information. He expressed concern that the state might have liability for an inadvertent disclosure simply due to the sheer volume of information that the state is required to deal with daily. He cautioned against making the state a target for litigation. He suggested an amendment to AS 45.48.060 that would provide that an action could not be brought against a governmental entity. The state would still be required to comply with all the terms of the bill. 9:07:46 AM MR. SNIFFEN explained that there are ways to require the state to comply with the requirements but not have a liability issue. He noted there wasn't an agency set up to address the regulatory issues as noted in Section 45.48.303(3)(A)(B)(C). 9:09:17 AM MR. SNIFFEN summarized with a reference to Section 45.48.410 and said the provision that requires additional governmental prohibition seems unclear as to whether that would also include a requirement imposed by state regulation. 9:11:18 AM SENATOR THERRIAULT asked for clarification whether his concern was over the word "expressly." MR. SNIFFEN replied yes. It seems unclear because there are arguments that could be made that express authorization needs to come from the Legislature and may not be sufficient to come from the agency. 9:13:38 AM CHAIR SEEKINS closed public testimony and held SB 222 in committee.