April 24, 2001
Contact: Lucas Hamilton
Privacy law will benefit Montana insurance consumers
A bill to protect the privacy of Montanans' health and financial information was signed into law Saturday after receiving widespread support from consumer and industry groups.
The law, proposed by State Auditor John Morrison, prohibits insurers from giving personal health and financial information to others without the written consent of the consumer, with limited exceptions. It also prohibits insurers from giving identifiable health or financial information to employers.
"We give our most sensitive health and financial information to insurance companies," said Morrison, who campaigned on a promise to support privacy legislation. "It's critical for people to maintain control of the information that is most sacred to them."
Information protected by the law has gained commercial value, Morrison said, which tempts some people and companies to sell sensitive medical and financial profiles or otherwise use them for profit.
"Gone are the days when our medical and financial secrets were safely locked in the file cabinet of our family doctor or lawyer," Morrison said. "Our most personal health and financial information can now be sent around the world instantly."
The protection of health records increasingly is important in part because of 1999 congressional legislation that overhauled banking laws, abolishing many of the barriers between insurance companies and financial institutions. Now, a bank, an insurance company and a telemarketing firm all can be owned by a single holding company and share information.
"Montanans can count on this measure to ensure that their bank or employer won't be checking their medical records before approving a mortgage or offering a job," said Sen. Eve Franklin of Great Falls, sponsor of the legislation.
The law prohibits insurers from treating policyholders adversely - by denying or canceling coverage or increasing premiums - just because a consumer declines to waive his or her privacy rights. It also sets the maximum penalty for violating a consumer's privacy rights at $25,000.
This privacy law makes right some of the dysfunctional aspects of Montana's previous law, which ultimately did nothing to protect consumers' privacy and hindered agents and companies from doing business.
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