Slide 1. Slide 2. Slide 3. Identity Theft Coverage. Today s Agenda. What is Identity Theft? What is Identity Theft?

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Slide 1 Identity Theft Coverage Presented by Hartford Steam Boiler Inspection & Insurance Company Copyright 2010 The Hartford Steam Boiler Inspection and Insurance Company Slide 2 Today s Agenda What

1 Slide 1 Identity Theft Coverage Presented by Hartford Steam Boiler Inspection & Insurance Company Copyright 2010 The Hartford Steam Boiler Inspection and Insurance Company Slide 2 Today s Agenda What is Identity Theft? How is your identity stolen & are you at risk? The Effects of Identity Theft Slide 3 What is Identity Theft? Copyright 2010 The Hartford Steam Boiler Inspection and Insurance Company

Slide 4 Identity Theft is Wrongful use of someone s personal or financial information to

Statistics 14% Credit Card Fraud New 18% Phone or Utility 13% Bank Fraud 14% Employment 9%

Theft is the #1 FTC complaint 32% of 2008 complaints About 4% of American adults are

2 Slide 4 Identity Theft is Wrongful use of someone s personal or financial information to commit fraud or other crimes I want your good name & identity Slide ID Theft Statistics 14% Credit Card Fraud New 18% Phone or Utility 13% Bank Fraud 14% Employment 9% Credit Card Fraud Existing 7% Loans 25% All Other Slide 6 Identity Theft Crime in America ID Theft is the #1 FTC complaint 32% of 2008 complaints About 4% of American adults are affected each year 10% spent at least 55 hours resolving their issues 10% reported out of pocket expenses > $1,200

3 Slide 7 A Question for You What percentage of identity fraud can be detected by the data that appears on a credit report? a) 16% b) 80% c) 50% d) 100% Slide 8 A Question for You What percentage of identity fraud can be detected by the data that appears on a credit report? a) 16% b) 80% c) 50% d) 100% Slide 9

Slide 10 Who Steals Our Identity? Slide 11 How Victims Information is Misused January 1 December 31, 2008 Total Number of Identity Theft Victims = 313,982 Attempted Fraud 6% Loan Fraud 4% Gov.

4 Slide 10 Who Steals Our Identity? Slide 11 How Victims Information is Misused January 1 December 31, 2008 Total Number of Identity Theft Victims = 313,982 Attempted Fraud 6% Loan Fraud 4% Gov. Document/Benefits Fraud 15% Employment Related Fraud 15% Other Identity Fraud 24% Bank Fraud 11% Utilities Fraud 13% Credit Card Fraud 20% Slide 12 Identity Theft Victims by State Per 100,000 Population More Than Less Than 60

Slide 13 A Question for You What state has the highest ID Theft

New York Illinois Arizona California Slide 14 Number of Months

19-23 Months (6%) 13 18 Months (2%) 7-12 Months (14%) 4 6 Months

Thieves Identity Steal Your Theft Information QuizMany Ways

5 Slide 13 A Question for You What state has the highest ID Theft incident rate? New York Illinois Arizona California Slide 14 Number of Months Between ID Theft & Discovery 3 Years or More (12%) 2 3 Years (8%) Months (6%) Months (2%) 7-12 Months (14%) 4 6 Months (10%) 0 3 Months (47%) 0% 10% 20% 30% 40% 50% Slide 15 Identity Thieves Identity Steal Your Theft Information QuizMany Ways Copyright 2009, Copyright The 2010, Hartford The Hartford Steam Boiler Inspection and Insurance and Insurance Company Company

Slide 16 Take A Look At Just How They Do It.

Credit Reports Bogus E-mails asking for personal information Steal at Workplaces Intercept Cell /

and worms Spamming Phishing schemes Spyware, adware, malware Keystroke loggers File Sharing Slide 18

6 Slide 16 Take A Look At Just How They Do It. Stolen Purses & Wallets Stolen Mail Change Victim s Address Dumpster Diving Fraudulently Obtain Credit Reports Bogus s asking for personal information Steal at Workplaces Intercept Cell / Mobile Telemarketing Scams Slide 17 Growing Criminal Sophistication Global criminal element Virus and worms Spamming Phishing schemes Spyware, adware, malware Keystroke loggers File Sharing Slide 18 Phishing We suspect an unauthorized transaction on your account. To ensure that your account is not compromised, please click the link below and confirm your identity.

Slide 19 Trojans and RATS Remote Access Trojans (RATs) Malicious software programs that criminals use to control victims

Keystrokes (on and off-line) Delete ANY files Put ANY file on a computer Slide 20 Wireless Security Concerns Vulnerable

and can reveal their security or lack thereof War Driving - thief drives (or walks) around to find unprotected and accessible

7 Slide 19 Trojans and RATS Remote Access Trojans (RATs) Malicious software programs that criminals use to control victims computers Monitor ALL online activity (purchases, chat, mail) Open Web Browser to specified location Record passwords Record Keystrokes (on and off-line) Delete ANY files Put ANY file on a computer Slide 20 Wireless Security Concerns Vulnerable Wireless Access Points (WAPS) Free WAP detection and logging tools available: Kismet, AirMagnet, Netstumbler Tools detect WAPs and can reveal their security or lack thereof War Driving - thief drives (or walks) around to find unprotected and accessible WAPs Some consumers & even system administrators fail to configure their Wireless systems adequately Slide 21 What age group is most vulnerable?

Slide 22 Risk Factors by Age Copyright 2010, 2009, The Hartford

Boiler Inspection and Insurance and Insurance Company Company

8 Slide 22 Risk Factors by Age Copyright 2010, 2009, The Hartford Steam Boiler Inspection and Insurance Company Slide 23 Are You at Risk for Identity Theft? Copyright 2010, Copyright The 2010, Hartford The Hartford Steam Boiler Inspection and Insurance and Insurance Company Company Slide 24 How At Risk Are You? points = High Risk points = Average Risk 0-50 points = Low Risk

Copyright The 2010, Hartford The Hartford Steam Boiler Inspection and

9 Slide 25 Ideas For Minimizing Your Risk Be Assertive Be Aware Be an Advocate Slide 26 Monitor Your Credit Reports Copyright 2010, Copyright The 2010, Hartford The Hartford Steam Boiler Inspection and Insurance and Insurance Company Company Slide 27 Free Credit Reports since 2004

10 Slide 28 Guard Your Social Security Number Slide 29 Protect Your Mail Red Flagging & Midnight Mailing 888-5optout Slide 30 Destroy Documents

11 Slide 31 Shop online with caution Slide 32 Pick your PINs Carefully Slide 33 Record your Credit and Bank account information

Slide 34 Don t take that call Slide 35 Be

12 Slide 34 Don t take that call Slide 35 Be Aware Of Sharks When Surfing The Net Copyright 2010, Copyright The 2010, Hartford The Hartford Steam Boiler Inspection and Insurance and Insurance Company Company Slide 36 Stop Companies from Selling Your Information

Slide 37 Let s go over it again How can you protect yourself?

mailbox Empty your glove box Monitor your trash Monitor

2010 The Hartford Steam Boiler Inspection and Insurance

13 Slide 37 Let s go over it again How can you protect yourself? Clean out your wallet or purse Credit/debit cards Lock your mailbox Empty your glove box Monitor your trash Monitor yourself Slide 38 The Effects of Identity Theft Copyright 2010 The Hartford Steam Boiler Inspection and Insurance Company Slide 39 Three Most Common Ways a Victim Discovers Identity Theft

Slide 40 Now That Your Data Has Been Stolen, How Will It Be Used? I didn t open up that account!

You don t want to hire me because of a criminal record!

prove difficult to dispute or remove inaccuracies from credit records Victim Made to Feel Like They

14 Slide 40 Now That Your Data Has Been Stolen, How Will It Be Used? I didn t open up that account! That isn t my car! How could my bank balance be zero? I ve never had knee replacement surgery! You don t want to hire me because of a criminal record!? Slide 41 Typical Victim Experiences Time Consuming Confusion & Frustration Emotional Toll It may prove difficult to dispute or remove inaccuracies from credit records Victim Made to Feel Like They Did Something Wrong Slide 42 Institutions Pay Only Part of the Cost Typically pay for direct fraud loss Don t pay for restoration costs, lost time or lost wages

15 Slide 43 The Financial Burden Falls To The Victim Lost Wages Credit Reports Loan Fees Certain Legal Fees Postage & Phone Charges Slide 44 Your Turn Questions Comments Slide 45 Marketplace Approaches to the Exposures Copyright 2010 The Hartford Steam Boiler Inspection and Insurance Company

Slide 46 Identity Theft Insurance Distribution: Master Policies Through Banks or Credit Card Issuers Employee Benefit Programs Commercial Lines Policies Homeowners Policies Slide 47 Identity Theft

16 Slide 46 Identity Theft Insurance Distribution: Master Policies Through Banks or Credit Card Issuers Employee Benefit Programs Commercial Lines Policies Homeowners Policies Slide 47 Identity Theft Insurance Master Policies: Banks, Credit Card Issuers and Employee Benefit Programs Mostly expense-only Non-admitted policy Certificate of insurance to insureds Slide 48 Identity Theft Insurance Individual Policies: Homeowners, Farmowners, Auto, Commercial Lines Mix of expense-only and programs with added services Policy endorsement Optional or automatic

17 Slide 49 Identity Theft Forms Slide 50 What to Call the Coverage? Identity Fraud Expense Coverage Identity Theft Insurance Identity Recovery Coverage Slide 51 Identity Theft Insurance Homeowners & Farmowners Insured = resident family members and minors Commercial Lines Policies Business Owners Sometimes Employees Special Programs Employees, students or members Alternate Distribution Banks, Online Programs

03 Independent Various Slide 53 Covered Expenses

18 Slide 52 Identity Theft Insurance Forms for Use with Homeowners Policies: ISO HO AAIS ML Independent Various Slide 53 Covered Expenses Out-of-Pocket Expenses Slide 54 Legal Expenses Certain Legal Fees

19 Slide 55 Other Coverages Lost Wages Child or Elder Care Slide 56 Limit & Deductible May be Occurrence or Annual Aggregates Limits Vary From $5,000 - $25,000 Deductibles Vary from $0 - $500 Slide 57 Coverage Trigger Discovery Occurrence

59 Identity Recovery Services Some Programs Include: Toll Free Help Line

20 Slide 58 Identity Theft Definition ISO Form requires that the fraud be a felony or federal offense AAIS and others use different definitions Slide 59 Identity Recovery Services Some Programs Include: Toll Free Help Line Personal Case Manager Other Specialized Services Slide 60 Data Compromise

Slide 61 Data Compromise The #1 concern of corporate

S. data breaches have affected 100 million people.

Types of Data Breach Electronic Hacking Physical

21 Slide 61 Data Compromise The #1 concern of corporate managers in a recent poll. In the past two years, U.S. data breaches have affected 100 million people. Slide 62 What is Data Compromise? Types of Data Breach Electronic Hacking Physical Theft Inadvertent Release Fraud Slide 63 Data Compromise on the Front Page

22 Slide 64 Who can be affected? Employees Directors Customers Clients Third Parties Slide 65 Laptop Theft Statistics 10% of laptops stolen in the first 12 months 90% of stolen laptops are never recovered 49% of companies had laptops stolen in the last 12 months 57% of corporate crimes are linked to stolen laptops Roughly 88 Million Americans exposed since Feb % of all reported breaches involved missing laptops Slide 66 Breach Notification Laws 45 States: Data Breach Notification Laws 47 States: Adopted Credit Freeze Laws Pending Federal Bills for Breach Notification

Consumers want companies held responsible for:

23 Slide 67 Slide 68 State Laws Differ Definition of Personal Information Duty to Warn Timely Notice Mode of Notification Slide 69 Wave of Consumer Sentiment Consumers want companies held responsible for: Safeguarding data Prompt notification to affected persons of a breach Communication of scope of damage Providing assistance

suppliers Lower or interrupted sales volume Loss of consumer trust due to data compromise Cost of responding to the breach

Copyright The 2010, Hartford The Hartford Steam Boiler Inspection and Insurance and Insurance Company Company Slide 72 Legal

24 Slide 70 Reputational Risks Risk of not notifying is a greater threat to a company s brand and reputation Negative media coverage Adverse impact to public image & reputation Slide 71 Financial Risks Cost of lost business Customer switches suppliers Lower or interrupted sales volume Loss of consumer trust due to data compromise Cost of responding to the breach Cost of notifications to those affected Legal reviews Forensic IT service Providing ID theft recovery services Copyright 2010, Copyright The 2010, Hartford The Hartford Steam Boiler Inspection and Insurance and Insurance Company Company Slide 72 Legal Risks Risk of legal action/lawsuits Affected persons seek payments for damages incurred from identity theft fraud & other misuse of personal data

Typically no Property Damage or Bodily Injury Largest cost is typically services to third parties May find some third party

25 Slide 73 Benefits of Notification Early notification may lower rates of misuse Evidence that public notification reduced misuse Breach notification can deter identity thieves Slide 74 Data Compromise Coverage? Typically no Property Damage or Bodily Injury Largest cost is typically services to third parties May find some third party coverage under cyber-risk forms Slide 75 Data Compromise Insurance Coverage forms just now appearing in the market Monoline and packaged First party only or first and third party

26 Slide 76 Issues for Insurers and Agents Slide 77 Issues for Insurers and Agents Sensitive Information on Claims: What is Needed? Who Should Have Access to It? How Should It Be Protected? Slide 78 Issues for Insurers and Agents Special Needs of Claimants: Emotional Issues Lack of Information Trust Confidentiality

Slide 79 Issues for Insurers and Agents We Can Get Fooled Fraudulent insured identity Fraudulent claims We Can Get Breached We keep lots of personal data We need to

com (Equifax, Experian, Trans Union) snopes.com Slide 81 Final Word The pain of being an identity theft victim is driving public reaction to data breach incidents.

27 Slide 79 Issues for Insurers and Agents We Can Get Fooled Fraudulent insured identity Fraudulent claims We Can Get Breached We keep lots of personal data We need to be part of the solution, not part of the problem Slide 80 Let s Share A Few Other Tips privacyrights.org consumer.gov/idtheft annualcreditreport.com (Equifax, Experian, Trans Union) snopes.com Slide 81 Final Word The pain of being an identity theft victim is driving public reaction to data breach incidents. The insurance industry can help by: Offering high quality services to identity theft victims Developing new coverages for data breach exposures Taking good care of data in our own control

28 Slide 82 Your Turn Questions? Comments?

c» BALANCE C:» Financially Empowering You Identity Theft Podcast [Music plays] Nikki:

c» BALANCE C:» Financially Empowering You Identity Theft Podcast [Music plays] Nikki: Identity Theft Podcast [Music plays] Nikki: You re listening to Identity theft protection. Hi. I m Nikki, your host for today s podcast. Identity theft occurs when someone uses your name, social security