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Health Net faces second probe over lost personal data

California Insurance Commissioner Dave Jones says he'll open an investigation of Health Net's loss of computer records containing personal information on nearly 2 million policyholders.

March 16, 2011|By Duke Helfand, Los Angeles Times

A second California insurance regulator has announced plans to investigate insurer Health Net Inc. for losing computer records that contain Social Security numbers and other personal information of nearly 2 million current and former policyholders.

State Insurance Commissioner Dave Jones said Tuesday that he would conduct a probe to determine whether the Woodland Hills company "did everything it could have done to avoid and appropriately remedy this security breakdown."

The California Department of Managed Health Care already is investigating the security breach, in which nine computer drives were found to be missing. The insurer said the records contain addresses, Social Security numbers, financial data and other information about customers, employees and healthcare providers.

The company said it was notified by IBM, which manages its information technology system, that it could not find the drives. Health Net said it was conducting its own investigation at its data center in Rancho Cordova near Sacramento.

Health Net provides health coverage to about 6 million people across the country. In California, 845,000 customers were affected by the lost records, state officials said.

The insurer said in a statement that it was notifying affected individuals and "offering them two years of free credit monitoring services, including fraud resolution and, if necessary, restoration of credit files, as well as identity theft insurance."

On Tuesday, Jones asked Health Net to forward its findings to the Insurance Department. The commissioner said his follow-up investigation would determine whether Health Net took adequate steps to safeguard its computer records.

"I have been in constant contact with Health Net on this matter, and I am pleased to see that the company is following protocol by notifying all the individuals affected by this privacy breach," Jones said. "With identity-theft crimes on the rise, it is more important than ever to act immediately and comprehensively in addressing a privacy breach."

Jones said Health Net customers could contact the Insurance Department's help line at (800) 927-HELP. Health Net said customers with questions could visit http://www.healthnet.com or call (855) 434-8081.

duke.helfand@latimes.com

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