There is an understandable public concern about the confidentiality of records about individuals that insurance institutions and their support organizations maintain. As previously noted, the collection of information about an individual without his full knowledge of the scope of the inquiry and its consequences may weaken the relationship between the insurer and the individual. The individual may be deterred from applying or may mistrust the insurer when he does apply. The Commission heard testimony that some people do not buy insurance for fear that the resulting information flow will come back to haunt them, either in a subsequent insurance decision or through disclosure to their employer.83 Others do not use their benefits-for instance, psychiatric coverage-for fear claims information will not be held in strictest confidence.84 In addition, the individual may he more likely to lie about information which he feels may go beyond the insurer. Confidentiality has become such a concern that some who maintain records about individuals, such as doctors and psychologists, are increasingly reluctant or unwilling to disclose the information in them, even when authorized to do so by the individual.85 Other sources, such as neighbors and associates, may also refuse to provide information or may provide inaccurate information.
Although insurance institutions and support organizations now assume some responsibility for the confidentiality of the information they collect and maintain on individuals, earlier parts of this chapter show the extent to which personally identifiable information is disclosed by numerous insurance industry organizations. Within the industry, information sharing occurs on a routine basis. Moreover, information may be disclosed to those outside the industry without the individual's knowledge.86 The Commission believes that the key to solving this important problem is to create an enforceable expectation of confidentiality which clearly delineates the circumstances under which an insurance institution or support organization may disclose information about art individual without his authorization.