Ga. Commissioner Extends ChoicePoint’s Probation

June 3, 2005

Alpharetta, Ga.-based ChoicePoint has received an extension in a 90-day probation period imposed by Insurance Commissioner John Oxendine, giving it more time to comply with his Feb. 24 order in reaction to reports that scammers had illegally obtained Social Security numbers and credit information about more than 145,000 customers.

Oxendine extended ChoicePoint’s probation, giving it more time to comply with an order to “show us that they have their act together” or be barred from doing business with insurance companies in Georgia.

In case of future security breaches, Oxendine ordered ChoicePoint to create a system with which to promptly notify consumers of a security breach and to hire an outside firm to audit its security measures. The firm has subsequently agreed to notify consumers about security breaches and set up a special response group.

Oxendine told the Atlanta Constitution that an audit of security procedures has not been completed. When it became apparent that ChoicePoint could not meet the May 24 deadline, the company asked the commission to lift the probation, he said.

“They have to report that probation in SEC filings and, of course, they weren’t crazy about that,” he said. “So their request was to have the probation lifted and that was denied.”

Oxendine said he understands why the audit is taking so long, saying, “As a practical matter for something this complex, going through every aspect of security system, it takes time.

“We felt ChoicePoint has substantially complied with everything under their power,” Oxendine said. “But we didn’t want to let them off the hook, so we extended their probation indefinitely. They are still on probation until we are satisfied.”

The probation does not restrict ChoicePoint’s business.

A ChoicePoint spokesperson had no immediate comment.

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