HARTFORD, Conn. - California-based insurer Health Net has agreed to pay Connecticut $250,000 for losing a disk drive containing private information of 1.5 million customers, including more than 300,000 Arizonans.
An Arizona investigation of Health Net's handling of the breach is still pending.
Connecticut Attorney General Richard Blumenthal announced Tuesday that along with the settlement, Health Net has agreed to provide services to customers including free credit monitoring. Nearly 450,000 Connecticut residents were affected by the security breach.
The state sued Health Net in January after the company reported it had lost a portable disk drive from its Shelton office in May 2009 but didn't tell customers until November 2009.
Blumenthal said the disk drive contained information on 446,000 Connecticut residents along with customers in Arizona, New York and New Jersey.
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A Health Net spokeswoman said Tuesday that the company has found no evidence the information has been misused. The company also said it has worked with state regulators to enhance its security systems.
In November, Arizona Attorney General Terry Goddard called on Health Net to notify 316,000 Arizona policyholders whose personal, medical and financial information was lost or stolen in the data breach.
Goddard also said he would open an investigation into whether a state law requiring prompt notification was violated.
Information on the status of that investigation was not available Tuesday, a spokeswoman for Goddard said.
In letters to affected policyholders, Health Net has offered two years of free credit-monitoring services, $1 million of identity-theft insurance coverage, and enrollment in fraud-resolution services for two years.
Additionally, if policyholders experience any identity theft between May 2009 and the date of their enrollment in the service, Health Net will provide services to restore their identities at no cost, the company said in a prepared statement to the Star.
Star Assistant Business Editor David Wichner contributed to this report.