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By Allison Colton

Traditionally, life insurance companies have used and relied upon blood and urine samples, as well as individually-completed questionnaires, to determine an applicant’s risk and to set premium rates.  However, for almost ten years, the use of social media data to reach such determinations has been a topic conversation.  Recently, New York life insurance companies were given the go-ahead to use the social media data of their customers when assessing an individual’s risk and setting their premium rates.

This approach is designed to use algorithms to sift through a wide variety of a customer’s life such as homeownership and credit records.  Such data might be discovered through an individual’s Instagram account.  Such monitoring provides a bird’s eye view into an applicant’s lifestyle choices; ranging from running a half-marathon or meditating to eating a Big Mac or binge drinking.  This new method also allows the insurance company to access an applicant’s cell phone data and, if their tracking is enabled, use their location to further identify their daily activities such going to grocery store or eating out at a restaurant.  Some data vendors are even suggesting that an applicant’s appearance in a photograph be used in a life insurance company’s assessment and analysis of that applicant’s risk.

However, this accessibility is not unlimited; life insurance companies must prove that the information they are collecting does not discriminate potential customers.  In an effort to ensure bias-free practices, the State of New York is has provided guidelines for how life insurance companies can find, access, and use such applicant data.  The insurance companies are required to implement various statistical and actuarial analysis as a means of ensuring that the data algorithms are unbiased.  In an attempt to avoid bias, some life insurance companies are only utilizing information available to the public.  Such information includes motor-vehicle records, civil and criminal court documents and property deeds and college-attendance records.  The State of New York has additionally permitted the use of information directly related to medical conditions and traffic fatalities.  

Beyond concerns about racial underwritings, there are numerous dangers that arise from the use of social media data.  Does this use of social media data violate the privacy rights of life insurance applicants? Does it infringe upon constitutional Fourth Amendment and tort law protections?  Fourth Amendment concerns stem from the potential use of this data by the government and specifically law enforcement in relation to applicants’ expectation of privacy.  In contrast, the Restatement of the Law, Second, of Torts § 652D (Publicity Given to Private Life) establishes that someone “who gives publicity to a matter concerning the private life of another is subject to liability to the other for invasion of his privacy, if the matter publicized is of a kind that (a) would be highly offensive to a reasonable person, and (b) is not of legitimate concern to the public.”

If a life insurance company collects data of an applicant participating in illegal drug activities and subsequently uses that data to determine risk, could the company provide that initial information to law enforcement?  It is reasonable to conclude that such communication could trigger the Fourth Amendment as it would be used by a government entity.  However, the courts have determined that the government’s use of personal information available or visible to the public does not constitute a Fourth Amendment violation.  Here, having a public Instagram account and posting a picture of yourself smoking weed is the social media equivalent of leaving a marijuana plant in the front window of your home with the curtains pulled back; both are visible and available to the public.  Similarly, posting a video of you working out is the equivalent of going for a run outside.  In both scenarios, by purposely availing yourself to public observation, you have waived your reasonable expectation of privacy; even if the activity presented might be highly offensive and not of public concern.  Thus, it is reasonably foreseeable that a court would find such use of public social media data does not violate the Fourth Amendment or privacy tort law.

If someone is a life insurance applicant that provides a public social media profile, then that person has purposely availed themselves to such searches.  Therefore, they are not afforded the same privacy rights as someone who has a private account; regardless of whether the applicant seeks legal remedy through the Fourth Amendment or tort law.  However, if the applicant’s social media requires a friend or follow request, he or she has established a reasonable expectation of privacy for anything posted or shared on their social media.  Thus, the use of social media data obtained from that account to assess and determine risk, as well as set the applicant’s premium rate, would violate that individual’s expectation of privacy and be a legally inappropriate collection and use of personal information.

While some uses of social media data in the life insurance industry may be legally permissible, it sets a dangerous precedent for how much personal data life insurance companies can access and utilize in the future.  Further, insurance is one of the most heavily regulated industries in the United States. Therefore, it is reasonable to expect the development of internal policy and promulgation of public regulations to guide these new life insurance program tactics.

Student Bio: Allison Colton is a second-year law student at Suffolk University Law School and a staff member on the Journal of High Technology Law.  She holds a B.S. in Animal Ecology and a B.A. in Political Science from Iowa State University.

Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.


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