A bill aimed at protecting consumers that passed last session by the Michigan Senate is “fatally flawed” and has the potential to disrupt core business functions in the state by guarding the use of Social Security numbers (SSNs), according to an insurance industry trade association.
S.B. 795, the Social Security Number Privacy Act, would prohibit an individual or entity from disclosing publicly or to a third party all or any part of the Social Security number of an employee, student or other individual unless consent is given in writing or the disclosure is authorized by law. Violators will incur a civil fine of not more than $1,000.
“Virtually all businesses today use consumers’ Social Security numbers for some type of legitimate identification,” said Gerald Zimmerman, assistant vice president and regional manager for the Property Casualty Insurers Association of America (PCI). “The legitimate use of SSNs is rarely specifically permitted by any federal or state law, and in fact is used by businesses, law enforcement and governments for just that reason. Prohibiting the use of SSNs will generate fraud, increase threats to public health and safety, and is unnecessary given current privacy protections.
“Legislation limiting the use of Social Security numbers will play havoc with the insurance industry and its consumers. It will make simple policy updates a long and involved process and slow down payment of claims. PCI, along with the state trade associations and other interested parties, is currently working with the House to amend this legislation.”
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