The State AG Report Weekly Update December 13, 2018

Cozen in the News

Cozen O’Connor’s State Attorneys General Practice Highlights the Diverse Class of 17 New AGs Taking Office in 2019

  • State Attorneys General Practice Policy Adviser Kristina Howard discusses how the 17 new incoming State AGs taking office in 2019 represent many firsts, including the first African American and female AG in New York, the first Jewish AG in Colorado, and the first Asian American elected to statewide office in Connecticut.
  • As described in the article, this new dimension of diversity should bring about fresh perspectives regarding the evolving role of AGs, influence AGs’ enforcement priorities, and shape how AGs approach working with the business community.
  • Visit Cozen O’Connor’s State AG Election Tracker to learn more about this diverse group, including interesting facts you may not know about each incoming AG.

Bureau of Consumer Financial Protection

Kathy Kraninger Confirmed by Senate as Director of the Bureau of Consumer Financial Protection

  • The U.S. Senate has confirmed Kathy Kraninger as Director of the Bureau of Consumer Financial Protection.
  • Director Kraninger, who previously served as a program associate director at the Office of Management and Budget, will replace Acting Director Mick Mulvaney.
  • As previously reported, Director Kraninger was nominated by President Trump in June 2018.

Data Privacy

New Jersey Attorney General Reaches Settlement with Health Insurance Provider Over Allegedly Unauthorized Disclosure of Policy Holders’ Personal Information

  • New Jersey AG Gurbir Grewal reached a settlement with health insurance provider EmblemHealth, Inc. and its subsidiary Group Health Incorporated (collectively, “EmblemHealth”) to resolve allegations that it improperly disclosed policy holders’ personal health information (“PHI”) in consumer mailings in violation of the state’s Consumer Fraud Act and Identity Theft Prevention Act and the federal Health Insurance Portability and Accountability Act (“HIPAA”).
  • According to the consent order, EmblemHealth allegedly failed to use appropriate safeguards to maintain the security of policy holders’ PHI when it sent mail to policy holders with publicly visible labels affixed that included each individual’s Medicare Health Insurance Claim Numbers (“HICNs”), which mirror individuals’ Social Security numbers (“SSNs”).
  • Under the terms of the consent order, EmblemHealth will pay $100,000 in civil penalties, notify affected policy holders, notify the state of future breaches, cease use of HICNs that include SSN or Medicare Beneficiary Identifiers (“MBIs”) to identify policy holders in mailings, prohibit other public disclosures of SSNs, HICNs, and MBIs, and provide privacy and security training to employees.

Vermont Attorney General Announces Creation of Working Group to Study Blockchain Technology

  • Vermont AG T.J. Donovan announced that the AG’s office and three other state agencies have established a working group to study the opportunities and challenges presented by blockchain technology—a data and record-keeping technology that uses cryptography to record transactions in a secure way that resists modification by unauthorized third parties, and is commonly used in cryptocurrency.
  • The working group plans to engage stakeholders, associations, and industry experts to determine whether and what type of blockchain-specific regulation or legislation is necessary and how to protect consumers who use or are affected by blockchain technology.
  • The working group plans to meet and commence work in January 2019.

Bipartisan Coalition of 44 Attorneys General Pens Letter to Social Security Administration Urging Modification of Database to Prevent Identity Theft

  • A bipartisan coalition of 44 AGs led by Kansas AG Derek Schmidt and Oregon AG Ellen Roseblum sent a letter to the U.S. Social Security Administration (“SSA”) urging it to modify its Social Security Number (“SSN”) database to provide greater protections against identity fraud.
  • The AGs’ letter urges the SSA to modify the SSN database to allow certified financial institutions to verify consumers’ SSN information in real time to ensure that valid SSNs are not being used by fraudsters to initiate financial transactions and credit inquiries.
  • According to the AGs’ letter, the SSA must make these modifications to comply with the Economic Growth, Regulatory Relief, and Consumer Protection Act, a law enacted in May 2018 aimed at addressing “synthetic identity theft,” in which thieves use real SSNs along with fictitious names and birthdates to manufacture new identities.

Gaming/Gambling

Wyoming Attorney General Issues Formal Opinion Analyzing Legality of Electronic Gaming Terminals Under State Gambling Law

  • Wyoming AG Peter Michael issued a Formal Opinion analyzing the legality of “Wyoming Skill Games,” electronic game terminals manufactured by Banilla Games, Inc. on which individuals can place wagers on the outcomes of spins on electronic interfaces designed to look like slot machines.
  • In Formal Opinion 2018-002 the AG explains that under Wyoming law, the electronic game terminals constitute gambling because, even though the games allow players to make certain decisions that may affect the outcome and their winnings, players risk property for gain and wagers are placed on the happening of an event that is contingent in whole or in part upon chance where the player has no control.
  • Accordingly, the Formal Opinion concludes that the terminals are gambling devices, those playing the games are engaging in gambling, and those providing the games are engaging in professional gambling.

Health Care

New York Attorney General Reaches Settlement with Health Insurance Company Over Use of an Allegedly Deficient Process of Updating Criteria for Gender Reassignment Surgery

  • New York AG Barbara Underwood reached a settlement with health insurance provider EmblemHealth, Inc. (“EmblemHealth”) to resolve allegations that it provided misleading or deceptive information to its plan members about coverage for gender reassignment surgery in violation of state consumer protection laws.
  • According to the AG’s office, EmblemHealth’s process for updating criteria for gender reassignment surgery utilized outdated, medically inaccurate, and non-evidence-based criteria for assessing requests and caused EmblemHealth to fail to properly review member requests for gender reassignment surgery.
  • According to the AG’s office, EmblemHealth will pay $250,000 in civil penalties, maintain and continue to update its gender reassignment surgery guidelines, and provide restitution to members who were improperly denied coverage and subsequently paid for gender reassignment surgery out-of-pocket.

State AGs in the News

Virginia Attorney General Announces Bid for Governor

  • Virginia AG Mark Herring, a Democrat and two-term incumbent AG, announced his intention to enter the state’s open gubernatorial race in 2021.
  • Current Governor Ralph Northam, a Democrat, is term-limited, as Virginia law prohibits the Governor from serving for consecutive terms.
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