The Indiana Attorney General's Office recently announced that it has reached a settlement over a data breach suffered by health insurer WellPoint, which may have exposed the personal information of more than 32,000 Indiana residents.
According to a statement from the Attorney General, WellPoint will pay the state $100,000, which will be used to provide restitution to certain Indiana residents affected by the breach.
"This case should be a teaching moment for all companies that handle consumers' personal data," said Indiana Attorney General Greg Zoeller. "If you suffer a data breach and private information is inadvertently posted online, then you must notify the Attorney General's Office and consumers promptly. Early warning helps minimize the risk that consumers will fall victim to identity theft."
The data breach reportedly occurred between October 2009 and March 2010, when consumers submitted insurance policies to WellPoint through a potential unsecured website, the Attorney General noted. Information contained on the applications included Social Security numbers, health records and financial information.
Under Indiana state law, companies that suffer data breaches are required to notify the Attorney General's Office of the incident "without reasonable delay." However, according to the agency's statement, WellPoint failed to do so. Instead, the Attorney General claimed, it found out about the incident through a news report.
"The requirement to notify the Attorney General 'without unreasonable delay' is not fulfilled by having me read about the breach in the newspaper," Zoeller said.
The data breach notification issue may soon be addressed by legislation working its way through the U.S. House and Senate. A proposed bill, which has been supported by the Obama administration, will consolidate the 47 data breach notification laws currently used by the states and the District of Columbia under one federal standard.