You are here:HomeIssuesPrivacy2006ChoicePoint Needs Agency Users to Sign FTC Form, PIA-Suggested Changes Made

ChoicePoint Needs Agency Users to Sign FTC Form, PIA-Suggested Changes Made

As a part of its formal settlement with the Federal Trade Commission (FTC) on a previous data security issue that arose in California, ChoicePoint is...
March 7, 2006

As a part of its formal settlement with the Federal Trade Commission (FTC) on a previous data security issue that arose in California, ChoicePoint is required by the FTC to secure signed documents from all of its database users asking the individual with corporate authority to certify that the user is authorized to access the specific database queried under an expressed provision of the Fair Credit Reporting Act (FCRA); the user may only use the information for those purposes; it may not make any further use of the information; and may not share the information with any person beyond those permitted uses.

In late February, ChoicePoint provided to PIA an advance copy of the form being sent to all of the producer/agency users of its databases for insurance purposes.  After review, PIA advised ChoicePoint of several changes that needed to be made to the form in order for it to both accomplish the FTC's serious and necessary legal demands of ChoicePoint, while at the same time using language that was more legally precise regarding PIA member agencies' standing in the matter.

The specific section cited is the provision in FCRA that allows insurers to use classes of information for their business of insurance underwriting.  Because insurance producers are the primary extension/tool of insurers in gathering this information for underwriting purposes, the FCRA exception is extended to insurance producers.  For CLUE and insurance scoring, this extended access is activated for insurance producers when an insurer sponsors them for that access.

What It Means to Agents:  ChoicePoint agreed with our comments and suggestions, and immediately revised the form. The newly revised package that is going out to the field this week includes and reflects PIA's requested changes.

It is important to heed the time frame and instructions noted by ChoicePoint in its cover memo, since insurance producers' compliance permits ChoicePoint to continue services to them.

Additional Note:  Because this is an area in which PIA receives regular inquiries, we are attaching the following related information piece about agency database access for Motor Vehicle Records (MVR) purposes. While PIA issued several such pieces years ago, the topic is still applicable today. We encourage PIA members to refresh their understanding of this issue in light of the ChoicePoint form that they are being asked to sign.

Both the FCRA site mentioned in the ChoicePoint Notice, and the PIA MVR article provide insurers' these exceptions with modified obligations no matter which vendor provides the database, e.g., Trans Union, Equifax, Stat DMV and the like.

Last, if there are other databases that PIA members are accessing from such vendors that relate to employment background checks and/or property owner modified CLUE for real estate sales, please remember to be guided by those additional, and sometimes different FCRA obligations, since in most circumstances your access would not be authorized under the insurance underwriting exception provisions.

Should you have any questions, please contact Pat Borowski, Sr. VP of Government/Regulatory Affairs for PIA National, at (703) 518-1360 or patbo@pianet.org.

PIA Member Access to Consumer Databases for P&C: Law & Insurance Underwriting, CLUE, Insurance Scoring,MVRS AND "Other" Uses 

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PIA National Contact

Jon Gentile
Director of Federal Affairs
jonge@pianet.org
(703) 518-1365

Patricia A. Borowski
Sr. VP, Government/Regulatory Affairs
patbo@pianet.org
(703) 518-1360