ChoicePoint Settles Lawsuit Over Records
ChoicePoint, Alpharetta, GA, helps property, casualty, life and health insurance companies and government agencies assess the risk of insuring households. The company has had a 25-year relationship with the state transportation department to provide Pennsylvania driver information to insurance companies, employers and others.
The contract was amended last year to preclude transmission of such data over the Internet. ChoicePoint's contracts with third-party recipients also preclude Internet transmission. However, one of those recipients breached its contract with ChoicePoint, causing ChoicePoint to be in violation of its contract with the transportation department.
However, department spokesman Rich Kirkpatrick said the agency had no evidence that the security of any drivers' records was compromised as a result of the breach of contract.
Under the settlement, ChoicePoint will pay the transportation department a $1.375 million penalty and will comply with new, more stringent contract requirements. ChoicePoint and the insurance companies will be required to have contracts with the department, and the insurance companies will share liability with ChoicePoint for maintaining the privacy of drivers' records.
ChoicePoint will be permitted to provide Pennsylvania drivers' records to insurance companies for insurance-related purposes only. In addition, the transportation department can terminate ChoicePoint's access to Pennsylvania records at any time for any reason.
J. Michael de Janes, ChoicePoint's general counsel, said his company is committed to the responsible use of public records. The company worked with both the transportation department and the state Department of Insurance to work out a settlement.