Right of Privacy in Insurance
When an insured files a claim under his health or life insurance, he naturally makes certain aspects of his life subject to investigation by the insurer so that the insurer may determine whether or not the claim is covered under the policy. However, in some instances, the insurer may exceed the bounds of the insured’s privacy during its investigation, most commonly when trying to obtain medical records for litigation. If it does so, the insured may be able to maintain an action against the insurer for an invasion of his right to privacy.
Types of invasion of privacy
An insurer may violate an insured’s right of privacy by intruding into his solitude or private affairs, publicly disclosing private facts, publicly placing him in a false light, or improperly appropriating his name or likeness for its own advantage.
Conduct constituting an invasion of privacy
Not all offensive, unethical, or inconsiderate conduct by an insurer qualifies as actionable as against an insured’s right of privacy. The conduct may be in bad taste or may annoy the insured without rising to the level of an invasion. In order for the insurer to be liable for invasion of privacy, its conduct must be sufficiently outrageous as to offend a court’s sensibilities.
Examples of conduct by the insurer that may constitute a violation of the insured’s right of privacy may include:
- using the insured’s status as an insured or an unauthorized testimonial from the insured for advertising purposes
- disclosing personal facts about the insured to third parties
- using abusive, threatening, or harassing tactics in negotiating claims
- conducting secret surveillance of the insured
Insurance Information and Privacy Protection Model Act
Because of the dangers related to an insurer’s invasion of an insured’s right to privacy, the National Association of Insurance Commissioners adopted the Insurance Information and Privacy Protection Model Act to maintain a balance between the insurer’s need for information and the insured’s need for privacy. The Act has been adopted by some states.
Some provisions in the Act include a prohibition against pretext interviews, which are conducted by an interviewer who pretends to be someone he is not or who states that he represents an insurer when he does not in order to obtain information from an insured. In addition, there are provisions related to disclosure of adverse underwriting decisions.
Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.