Triangle Troubleshooter

Troubleshooter: Company admits security breach

Staff WriterDecember 8, 2010 

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A few months ago, Errol Nix took out a life insurance policy with Prudential Insurance. A single father with full custody of his 8-year-old son, Nix wanted a policy in case anything happened to him.

His formerwife, who lives in Utah and has no parental rights since they divorced four years ago, found out about the policy and called Prudential in September to take out another policy on Nix, unbeknown to him, he said.

When she called, a sales agent provided her with information on Nix's policy, such as its worth and the beneficiary.

Nix found out about the security breach when the sales agent called to tell him of the mistake.

Because Nix was uneasy about his former wife trying to take out life insurance on him, he and his son moved from Utah to Raleigh last month.

Since then, he has complained to Prudential and its subsidiary, Matrix Direct, which employed the call center sales agent.

Matrix Direct sent him a letter dated Nov. 17, admitting the mistake: "The name of the insurer, the amount of the policy and the beneficiary on the policy was disclosed by the sales agent." But according to the company's investigation, the policy number and other sensitive information were not given.

The letter continued: "It is not Matrix Direct's policy to disclose policy information to individuals other than the policyholder. We ... have taken corrective action with the sales agent."

Though there was an apology, the letter did not offer Nix a solution now that his information was disclosed to his former wife.

So after he moved, Nix filed a complaint with the N.C. Attorney General's Office and called the Triangle Troubleshooter.

I called Robin Rodriguez, the Matrix Direct executive assistant, who signed the letter to Nix.

"We are not interested," she said and hung up.

I then called AIG in New York, which is Matrix Direct's parent company. They put me in touch with Rhonda Sloan, a spokeswoman for American General Life Companies, which represents Prudential. (A matrix indeed!)

Sloan said she could not speak about the matter on the record. But she asked me what Nix wants.

He wants out of his life insurance policy with Prudential at no cost, as well as $5,000 to cover the cost of his cross-country move because the breach caused him to move away from his former wife, he said.

"That's probably letting them off easy," Nix said.

Later Tuesday, Sloan said Prudential is working on his request but did not have a resolution yet.

What the law says

Nix wanted to know whether Prudential and Matrix broke any laws by providing this information to his former wife. I called the N.C. Department of Insurance to find out.

According to Article 39 about Insurance Information and Privacy Protection, under general statute 58-39-75, "An insurance institution or agent shall not disclose any personal or privileged information about an individual collected or received in connection with an insurance transaction unless the disclosure is with the written authorization of the individual."

If any insurance institution or agent fails to comply with this statute, a customer whose rights are violated may file suit in the county superior court, the statute states. The institution or agent that discloses information in violation of the statute is liable for damages.

If it happened here

The law also states that if the state's insurance commissioner, Wayne Goodwin, thinks an insurance company or agent violates this statue, the commissioner may subpoena the company for a hearing. At the hearing, the insurance company has the opportunity to answer the charges against it and present evidence on its behalf. The commissioner can call the affected person to testify.

Nix called the Department of Insurance to file a complaint, but because the policy was taken out in Utah, he was told to file a complaint in that state, which he did.

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