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Sec. 5. Limitations on disclosure of claims information to law enforcement
agencies.
Sec. 6. Separation of the functions of a crime bureau from the functions of an
insurance data support organization.
Sec. 7. Coordination with State law.
Sec. 8. Enforcement.
SEC. 2. FINDINGS.
The Congress finds that—
(1) property and casualty insurers annually col-
lect information pertaining to the claims filed by
millions of policyholders and other individuals;
(2) this information is generally provided to in-
dustry organizations for the purpose of assisting in-
surers to quickly pay a claim or, alternatively, to de-
termine whether a pattern of claim filings exists that
warrants further investigation;
(3) there is a legitimate need for insurers to
pool claims information among themselves and to
work with law enforcement agencies in order to as-
sure the integrity of the claims decisionmaking proc-
ess;
(4) while the insurance industry has historically
taken strong and effective measures to prevent the
improper disclosure of personal claims information
to law enforcement agencies, it is now preparing to
eliminate those protections and provide individual
claims information on innocent individuals, as well
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as their doctors and lawyers, to law enforcement
agencies;
(5) although insurance is generally regulated by
the individual States pursuant to the Act of March
9, 1945 (referred to as the ‘‘McCarran-Ferguson
Act’’), and despite the fact that the National Asso-
ciation of Insurance Commissioners has proposed
model privacy legislation which has been adopted in
certain States and addresses the provision of individ-
ual information to law enforcement agencies, the As-
sociation’s model legislation has not been enacted in
most of the States and has not prevented the insur-
ance industry from proceeding with its current
plans;
(6) the unfettered disclosure of personal claims
information by insurers to law enforcement agencies
on innocent individuals violates fundamental prin-
ciples of individual privacy and may result in intimi-
dating individuals in exercising their rights to file
claims; and
(7) in the absence of effective State regulation,
a uniform rule, established through congressional en-
actment, is the only method for assuring the protec-
tion of personal privacy rights.
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SEC. 3. PURPOSES.
The purposes of this Act are—
(1) to protect the personal privacy rights of in-
surance customers and claimants by making certain
that property and casualty insurers do not improp-
erly provide personal information about innocent in-
surance claimants to law enforcement agencies;
(2) to establish clear rules for separating the
operation of an insurance crime bureau from the op-
eration of an insurance data support organization in
order to prevent the inappropriate use of insurance
claims information; and
(3) to establish strong and effective remedies
for violations of this Act.
SEC. 4. DEFINITIONS.
As used in this Act:
(1) ALL
CLAIMS
DATABASE.—The term ‘‘all
claims database’’ means any data collection system,
electronic or manual, which obtains information
about property and casualty insurance claims with-
out regard to whether there is a reasonable belief
that any specific claimant has engaged in any illegal
or fraudulent act.
(2) CRIME BUREAU.—The term ‘‘crime bureau’’
means any nongovernmental organization which, in
whole or in part, (A) investigates potentially illegal
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or fraudulent acts with regard to property and cas-
ualty insurance claims, or (B) shares information
about such claims with any law enforcement agency,
absent a subpoena or court order; except that the
term does not include the activities of a property
and casualty insurer.
(3) INSURANCE CLAIMS DATA SUPPORT ORGANI-
ZATION.—The term ‘‘insurance claims data support
organization’’ means any nongovernmental organiza-
tion which regularly engages, in whole or in part, in
the practice of assembling or collecting claims infor-
mation about persons for the primary purpose of
providing information to property and casualty in-
surers, self-insurers, or the administrators of an in-
surance program; except that the term does not
include the activities of a property and casualty in-
surer.
(4) PROPERTY AND CASUALTY INSURANCE.—
The term ‘‘property and casualty insurance’’ means
every line of insurance, except life insurance and
health insurance, and includes, but is not limited to,
automobile insurance, homeowners insurance, and
workers’ compensation insurance.
(5) PROPERTY AND CASUALTY INSURER.—The
term ‘‘property and casualty insurer’’ means any
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person engaged in the business of insurance who
provides property and casualty insurance, either di-
rectly or through agents or brokers.
SEC. 5. LIMITATIONS ON DISCLOSURE OF CLAIMS INFOR-
MATION TO LAW ENFORCEMENT AGENCIES.
(a) DISCLOSURE BY PROPERTY AND CASUALTY IN-
SURER AND CRIME BUREAU.—No property and casualty
insurer or crime bureau may disclose to a law enforcement
agency any information pertaining to a claim unless it is
doing so—
(1) to protect the interests of the insurer or
crime bureau in preventing or prosecuting the per-
petuation of fraud upon it; or
(2) if the insurer or crime bureau reasonably
believes that illegal activities have been conducted by
the individual.
(b) DISCLOSURE
BY DATA SUPPORT ORGANIZA-
TION.—No insurance data support organization may dis-
close to a law enforcement agency any information per-
taining to a claim unless it is doing so—
(1) to protect the interests of the organization
in preventing or prosecuting the perpetuation of
fraud upon it; or
(2) to respond to a subpoena or court order.
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SEC. 6. SEPARATION OF THE FUNCTIONS OF A CRIME BU-
REAU FROM THE FUNCTIONS OF AN INSUR-
ANCE DATA SUPPORT ORGANIZATION.
(a) IN GENERAL.—An insurance data support orga-
nization may establish and operate an all claims data base
and may establish a system for providing claims informa-
tion to a crime bureau for the purpose of detecting fraudu-
lent or other illegal activities pertaining to specific claims
or to specific categories of claims where fraudulent or
other illegal activities are reasonably believed to have oc-
curred; but an insurance data support organization may
not engage in the activities of a crime bureau.
(b) CRIME BUREAU.—A crime bureau may engage in
activities designed to prevent, suppress, and prosecute
fraud, including, when otherwise authorized by law, the
conduct of appropriate investigations of claimants and col-
laborative activities with law enforcement agencies; but a
crime bureau may not operate an all claims data base or
collect claims information, either directly or indirectly,
that may result in the establishment or operation of such
a data base.
SEC. 7. COORDINATION WITH STATE LAW.
(a) IN GENERAL.—Nothing in this Act shall be read
as prohibiting any State from enacting legislation estab-
lishing more stringent protections than are provided in
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this Act for the privacy of information contained in prop-
erty and casualty insurance claims.
(b) STATE CERTIFICATION.—Without regard to the
provisions of section 8, any State may certify to the Attor-
ney General of the United States that it has established,
through law or regulation, the same protections and en-
forcement procedures that are incorporated in this Act.
Upon approval of that certification by the Attorney Gen-
eral, and publication of that certification in the Federal
Register, enforcement of this Act shall be solely pursuant
to that certification. The Attorney General may revoke a
certification for any material breach of its provisions.
SEC. 8. ENFORCEMENT.
(a) INJUNCTION.—Any violation of this Act may be
enjoined in any Federal district court without regard to
any jurisdictional amount otherwise required. Such an in-
junctive action may be brought by the Attorney General
or by any private party.
(b) CIVIL PENALTY.—Any violation of this Act may
also be subject to a civil penalty of not more than $10,000.
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