CIPR Event Examines Cyber Liability Risk and Issues Facing the Insurance Industry
July 2014, CIPR Newsletter
Identity Theft: A Rise in Identity Theft Spurs New Type of Insurance
September 2009, NAIC Alert
Protecting Your Student's Future
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Director, Regulatory Services and CIPR 816-783-8262
Last Updated 6/12/17
Issue: Identity theft occurs when someone obtains and uses your personal information fraudulently, oftentimes for financial gain. Most people think of credit reports, credit cards, and bank accounts when they hear the words “identity theft.” This type of identity theft is financial identity theft; however, many more types of identity theft exist. Other types of identity theft include medical identity theft; insurance identity theft; driver’s license identity theft; criminal identity theft; social security identity theft; synthetic identity theft; and child identity theft.1
Overview: The World Privacy Forum states medical identity theft occurs when someone uses a person’s name, as well as another piece of their identity, without the person’s knowledge or consent to obtain medical services or goods. This type of identity theft causes the placement of incorrect or fictitious information into existing medical records. Medical identity theft is one of the most difficult types of identity theft to repair once it occurs.
Insurance identity theft, like financial and medical identity theft, can affect your medical care. Most people are in need of healthcare; however, if someone is unable to obtain healthcare insurance they may go to the lengths of stealing someone’s insurance identity in order to get medical services. If the victim is unaware that someone is using their health insurance, they are susceptible to fraudulent claims against a legitimate policy. The policy may reach its maximum payout, therefore causing cancellation of the policy. The victim may also have problems obtaining health insurance from another carrier.2
Driver’s license identity theft is possibly the easiest form of identity theft to commit. If someone steals your purse or wallet, your driver’s license can easily be sold to someone who looks like you. Once a person has your driver’s license it is easy to obtain other forms of identification in your name.3 Similarly, criminal identity theft occurs when a criminal steals your identity in order to commit a crime, enter a country, get special permits, hide one’s own identity, or commit acts of terrorism. It is difficult to resolve criminal identity theft, because it now looks like you are the criminal.4
A social security number is the most important piece of information a bank needs when extending credit or opening an account. Additionally, social security numbers are used to obtain medical care, file a fraudulent tax return, commit crimes, or steal your social security benefits. Many people do not want to pay taxes or child support; therefore, they may steal a social security number to avoid paying these debts. This type of identity theft is also difficult to resolve.5
Child identity theft occurs when someone steals the identity of a child, as it is unlikely that a child will look at his or her credit for several years. Unfortunately, many times a friend or family member commits this type of identity theft, which may mean the parent does not want to press charges.6
Finally, one of the newest types of identity theft is synthetic identity theft. This occurs when pieces of information is taken from many victims and combined to form a new identity.7
Status: The NAIC and state insurance regulators are increasing efforts to tackle identify theft issues. The Cybersecurity (EX) Task Force, Property and Casualty Insurance (C) Committee and the Financial Condition (E) Committee collaborated to develop the Cybersecurity and Identity Theft Insurance Coverage Supplement for insurer financial statements to gather financial performance information about insurers writing cyber-liability coverage nationwide.
If you are a victim of identity theft, please visit https://www.identitytheft.gov/ and follow the steps provided. More consumer information can be found by visiting http://www.idtheftcenter.org/Identity-Theft/identity-theft-protection-tips-while-on-vacation.html.