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The State

Allstate Loses Access to DMV Computer Data

Nine-month probe finds the state's third-largest auto insurer violated confidentiality rules. Company still can put its requests in writing.

January 17, 2003|Kenneth Reich | Times Staff Writer

The state Department of Motor Vehicles on Thursday revoked Allstate Insurance Co.'s electronic access to confidential drivers' records, after finding in a nine-month investigation that the company had violated state confidentiality rules 131 times.

DMV Director Steven Gourley said he would ask the state attorney general's office to seek fines against Allstate before its access would be restored. He said the maximum fine allowed per violation is $100,000, but made no estimate of what the fine would total.

Allstate is California's third-largest auto insurer, with 2.2 million policyholders, or 10.5% of the state's insured drivers.

Company spokeswoman Emily Daly said that while "Allstate regrets that its security and customer confidentiality procedures, including the requirement to follow appropriate DMV regulations, were not followed in some cases ... we would have preferred that the department accept our offer to work through appropriate resolution of these issues before taking today's actions."

Although Gourley said Allstate retains the right to obtain the records manually by submitting requests in writing to DMV offices, the company said, "The processing delays that will result from the department's actions will only cause inconvenience to California drivers."

Gourley said the DMV initiated its investigation after a complaint that "an Allstate customer's confidential address had been released, which resulted in a written threat to that person."

When DMV investigators began visiting Allstate offices, he said, they found frequent cases of DMV passwords being used in public view, and uncovered instances in which Allstate employees had sought the records of relatives and friends without good business reason.

The release of DMV records was restricted in 1989 after an obsessed fan of actress Rebecca Schaeffer hired a private investigator to obtain her home address from the DMV, showed up on her doorstep and, when she appeared, shot and killed her.

Up until that time, such DMV records were public information, and any member of the public could ask for and receive them.

Now, after the death of the 21-year-old actress, only those with a reason to have them can get them through an elaborate system of codes and passwords. Auto insurers frequently need drivers' records to show whether a person is a good risk, or to check if someone making a claim against the company has been involved in other accidents.

Gourley said Thursday that companies sign contracts with the DMV to keep such information private.

"It turned out in our investigation that they were not keeping tabs on the confidentiality," he said. "They were putting our password numbers on the computer so anyone could see them or access them."

A few of the Allstate offices visited also "wouldn't let our auditors in, or they threw them out," Gourley said. "That alarmed me. When they're so defensive, it arouses our suspicions."

Late Thursday afternoon, a senior spokesman for Allstate, Peter Debreceny, said the company has initiated discussions with the DMV in an attempt to settle the matter. The discussions have "been good, and the prospects are promising," he said.

But Gourley said he would be in no hurry to resolve the matter, short of getting full satisfaction.

Consumers Union's advocate on auto insurance, Norma Garcia, said, "Our position is that these are very serious allegations, and we would hope that there will be a full inquiry by both the DMV and the Department of Insurance. Release of information of this sort is very sensitive."

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