Health Net fined $375K for information security lapse

The Connecticut Insurance Department has fined Health Net $375,000 for failures to safeguard the personal information of its members from misuse by third parties.

The data breach concerned the loss of a disk drive containing medical claims and financial information for about 1.5 million Health Net customers, including 446,000 in Connecticut, according to Info Security.

Health Net (NYSE: HNT) first reported the lost information in November 2009, six months after it went missing. During that time, the insurer hired an independent computer company to determine the amount and nature of the information on the hard drive, the Hartford Courant reports.

"We are pleased with the way Health Net responded to the Department's concerns regarding its internal practices. I believe they have taken the proper actions to implement systemic changes and guard against injury to its members resulting from the lost disk drive," Connecticut Insurance Commissioner Thomas Sullivan said.

Health Net spokeswoman Lauralee Heckman told the Hartford Courant that the company has no evidence of misuse. "We have offered two years of credit monitoring services for anyone eligible to elect this service. The service also includes $1 million of identity theft insurance coverage and enrollment in fraud resolution services for two years, if needed," she said.

To learn more:
- read the Hartford Courant article
- read the Info Security story
- see the Connecticut Insurance Department statement