Life Insurance Companies Have Access to Your Social Media Content

It’s wise to exercise caution before you post anything online, especially if you are looking to purchase life insurance in New York. The New York State Department of Financial Services authorized the usage of social media data to set premium rates. Some consider it an intrusion that raises a lot of ethical questions and sets fears of privacy infringement.

New York is the first state to impose regulations on the validity of such data collected from social media. The department says they support innovation and technology in the realm of life insurance. They also specified that the data collected has nothing to do with the medical situation of the policyholder. There are limits set that forbid the use of race, color, creed, national origin, status as a victim of domestic violence, and past lawful travel.

A recent report by the Wall Street Journal shows that not many companies will consider social media data to determine their premium rates.  The use of algorithms and patterns to discern someone’s life insurance rate is not entirely new. They are just attempting to make the whole process more transparent.

This kind of surveillance, however, raises a lot of privacy questions. First of all, people’s behavior and moods tend to change, so collecting social media data may lead to an imbalance in premium rates. While the rules against discrimination are clear, it’s important to have some tests and checks in place for these algorithms with regular reports provided so that the effort is kept clean. This new approach will eventually lead to protests from individuals about a breach of privacy.

The new method digs deeper into people’s privacy and it moves away from traditional methods such as questionnaires, which raises a lot of ethical questions. It should be noted that insurance companies had access to social media even before this move, but this new approach is a direct contact with personal information.

How accurate is the data retrieved? For example, some people may be non-smokers, but they work at a local cigar shop. A woman may be a bartender or waitress and the data shows that she is out in a bar almost every night.  A mass collection of data means that the small details go unnoticed and that misinformed rejections will unfortunately occur.

Yes, insurers will find it easier to issue policies and those lying on their application may find it harder to get away with it. For example, someone says they don’t drink or smoke, but their Facebook timeline shows a different story. That’s a quick rejection on the part of the insurer.

Transparency can be beneficial, but soon the public is going to start questioning how their data is used, and how private they can be online. So far, New York is the only state creating an official regulation, but soon enough more states will join.  

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