INDUSTRY UPDATE                                                                         February 1, 2006

IDENTITY THEFT AND THE IMPROPER USE OF SOCIAL SECURITY NUMBERS

As many of you are aware, identity theft has become a huge problem as technology has provided those that would misuse personal, confidential information with new and interesting ways of collecting that information.  As a result, it becomes necessary for each of us to take extra precautions to insure that personal, confidential information is kept private so that those who seek to misuse such information are less likely to be able to gather that information.

In an effort to prohibit the misuse of personal, confidential information, federal and state governments have passed laws that dictate what those who legitimately collect confidential information for business purposes must do in order to protect the information.  Substantial penalties for violators can be assessed against those who do not comply with these regulations. 

In an on-going effort by Prime Rate to ensure that the confidential information it collects is used appropriately, Prime Rate regularly reviews premium finance contracts to verify that the information contained on the contracts is accurate.  Using a social security number on the contract that does not belong to the insured on the contract is an improper use of the number that not only can have a negative impact on the credit of the person whose number is being used, but also can cause the agent who misuses the number in this way to suffer significant penalties.  Given the current environment and the emphasis placed on protecting social security numbers, this is an especially bad business practice.

The risks involved in the improper use of social security numbers are ones that Prime Rate is not willing to take.  Should an agent engage in this activity he/she will not be authorized to do business with Prime Rate.  Should Prime Rate be caused to incur penalties because of an agent’s improper use of social security numbers, Prime Rate will hold that agent fully and completely responsible.  Prime Rate hopes that you can appreciate the seriousness of this matter and give it the attention it deserves.  If you would like to discuss this issue or any others, please feel free to contact Jay Lingle. 

PRIME RATE PREMIUM FINANCE CORPORATION, INC.