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Cyber Liability: Data Breach Hits Premera Blue Cross


Cyber Liability in the Forefront in Wake of Healthcare Breaches

Just over a month since we learned of Anthem’s massiCyber Liability: Data Breach Hits Premera Blue Cross ve data breach affecting 80 million records, health insurer Premera Blue Cross has disclosed that an intrusion into its network may have resulted in the breach of financial and medical records of 11 million customers. The company learned of the attack back in late January and preliminary investigations show that the initial breach occurred in May 2014.

This incident affected Premera Blue Cross, Premera Blue Cross Blue Shield of Alaska, and its affiliate brands Vivacity and Connexion Insurance Solutions, Inc., a company statement revealed. The statement also revealed that the “hackers may have gained unauthorized access to applicants and members’ information, which could include member name, date of birth, email address, address, telephone number, Social Security number, member identification numbers, bank account information, and claims information, including clinical information. This incident also affected members of other Blue Cross Blue Shield plans who sought treatment in Washington or Alaska.”

Moreover, individuals doing business with Premera and who provided the heath insurer with their email address, personal bank account number or social security number are also affected. The investigation to date has not determined that any such data was removed from its systems and whether the data has been used inappropriately.

According to Premera, the insurer will be notifying affected customers in letters sent out via postal mail, and that it will be offering two years of free credit monitoring services through big-three credit bureau Experian. The cyber attack may be the work of state-sponsored espionage groups based in China, similar to what happened to Anthem. Premera is working with the FBI in the investigation.

The Anthem and Premera data breaches highlight the vulnerability that health insurers face against cyber attacks. In fact, according to reports by Gemalto, a global provider of digital solutions, health organizations had 29,384,567 data records compromised in 2014, with the average records lost per breach for the industry at 75,152 compared with 49,000 in 2013. And this risk is expected to get worse, with cyber criminals targeting the sector increasingly more. Healthcare data is rich and filled with information that criminals can use for identity theft and fraud. And, as evident by the time lag in the Premera incident between when the breach occurred and the date it was discovered, it takes far longer for the company itself and patients to know their information has even been compromised. According to security experts, for example, when a credit card is stolen, algorithms in the financial industry are alerted to any unusual activity fairly fast and systems often automatically provide protection. These types of protections don’t yet exist in healthcare.

These breaches also underscore the ever-importance of a comprehensive cyber security plan, which includes Cyber Liability insurance. Axis Insurance Services specializes in securing Cyber coverage including for medical facilities where data breaches and networks security issues present significant risk. Call us to review your cyber plan and learn how we can help protect you in the event of a data compromise. Our cyber insurance specialists can be reached at (877) 787-5258.

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Blogged on: March 23, 2015 by Mike Smith
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