ROBERT L. EHRLICH, JR., Governor                            S.B. 117

certain documents sent via traditional mail or relating to property interests. Prior to
January 1, 2005, a person that uses a Social Security number in a manner prohibited
by Senate Bill 117 may continue to do so if the use is continuous or notice is given of
the right to stop the use of the Social Security number. Finally, the bill applies to all
health insurance policies issued, delivered or renewed on or after January 1, 2005.
Health insurance policies or contracts in effect before January 1, 2005, must be in
compliance by January 1, 2006.

This legislation has the laudable goal of protecting the privacy of a person's Social
Security number. Widespread use of Social Security numbers for identification has
created a society subject to a proliferation of identity theft crimes. One section of the
bill, however, makes it more difficult for consumers to transact businesses with their
insurers. An insurer can only include an individual's Social Security number in
documents sent by mail. Insurers are specifically prohibited from using electronic
mail (even if there is a secure connection and the SSN is encrypted) and facsimile
transmissions.

Insurers uniformly use e-mail and facsimile transmissions to transact business with
consumers at their request and to prohibit this practice would cause undue hardship
on Maryland consumers. For example, the insurer United Services Automobile
Association (USAA) primarily deals with servicemen and women who are deployed
and often have changing needs with respect to life insurance and other insurance
products. Prohibiting the use of a Social Security number for identification via e-mail
or facsimile will substantially inconvenience military personnel who are often
deployed in areas where traditional mail is not timely. Often, the processing of an
application is time-sensitive for these individuals who are deployed in the service of
their country. The importance of using one's Social Security number for identification
under these circumstances was highlighted by USAA, which pointed out that there
are 1,800 USAA members named "David Johnson".

Moreover, California adopted a statute restricting the use of Social Security numbers
for identification purposes in 2002 that has become the industry standard. This
statute permits an insurer to transmit an individual's Social Security number via
e-mail and facsimile if it is over a secure connection and encrypted. Given the
absence of a federal law and the fact that insurers such as USAA deal in multiple
states, it is critical that Maryland's law comports with the laws of other states.

For the above stated reasons, I have vetoed Senate Bill 117.

Very truly yours,
Robert L. Ehrlich, Jr.
Governor

Senate Bill No. 117

AN ACT concerning

Consumer Protection - Privacy of Social Security Numbers

FOR the purpose of prohibiting the public posting or displaying of an individual's
Social Security number under certain circumstances; prohibiting the printing of

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