Connecticut Fines Health Net $375,000 For Security Breach Last Year
I’m was somewhat confused by this news reports of another Health Net settlement with Connecticut over a 2009 breach. Matthew Sturdevant reports:
Health Net faces a $375,000 fine for a security breach that happened last year at the insurer’s Northeast headquarters in Shelton, the Connecticut Insurance Department said Monday.
A portable, external hard drive was lost or stolen in May 2009. It contained medical claims and financial information for about 1.5 million Health Net customers, including 446,000 in Connecticut.
Fines were levied for the company’s failure to safeguard the personal information of its members from misuse by third parties, the state Insurance Department said.[…]
Attorney General Richard Blumenthal’s office last year said the company, Kroll, determined that two laptops were stolen from the Shelton offices at about the same time the hard drive was taken.
So when Attorney General Blumenthal settled a lawsuit under HITECH for $250,000 for this breach, that didn’t include all state claims and now the Insurance Commission has fined them under state law? I thought the $250k settled all state claims. I guess not. A statement from the Connecticut Insurance Commission says:
Today, Connecticut Insurance Commissioner, Thomas R. Sullivan announced that the Insurance Department has reached an agreement with Health Net of Connecticut (“Health Net”) to pay $375,000 in penalties levied for what the Insurance Department considered to be failures to safeguard the personal information of its members from misuse by third parties. The most prominent failure stemmed from the untimely notification of the 2009 loss of a disk drive from the Shelton location resulting in the loss of personal health information of approximately 500,000 Connecticut members.
Health Net cooperated fully with the Insurance Commissioner’s review of this matter, and in addition to providing credit monitoring protection for 2 years to all Connecticut members and providers who were affected by the 2009 data breach, Health Net has undertaken significant steps to improve data and equipment security in both Shelton locations. Under the terms of the settlement, none of the cost of those improvements will be passed along to Health Net members.
“We are pleased with the way Health Net responded to the Department’s concerns regarding its internal practices. I believe they have taken the proper actions to implement systemic changes and guard against injury to its members resulting from the lost disk drive” said Commissioner Sullivan.
ABOUT THE CONNECTICUT INSURANCE DEPARTMENT
The mission of the Connecticut Insurance Department is to serve consumers in a professional and timely manner by providing assistance and information to the public and to policy makers, by regulating the insurance industry in a fair and efficient manner which promotes a competitive and financially sound insurance market for consumers, and by enforcing the insurance laws to ensure that consumers are treated fairly and are protected from unfair practices. For more information, visit the Connecticut Insurance Department at www.ct.gov/cid.