Legislature(2005 - 2006)BUTROVICH 205
02/28/2006 08:30 AM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB222 | |
| SB216 | |
| SB284 | |
| SJR20 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 20 | TELECONFERENCED | |
| *+ | SB 284 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 216 | ||
| = | SB 222 | ||
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.
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