Privacy can be broadly described as the right to be let alone. Contrary to many people�s belief, the right to privacy is not a fundamental right guaranteed by the language of the United States Constitution. There is no reference whatsoever to anything like a right to privacy in the seven articles that make up the text of the Constitution. Indirect references to privacy can be found only in the amendments to the Constitution.

The first amendment forbids Congress from prohibiting the free exercise of religion. Although this provision has been interpreted to permit some restrictions on a person�s religious freedom, there is an element of the right to be let alone inherent in it. The third amendment prohibition against quartering soldiers in private homes grants homeowners a limited right to be let alone. However, this prohibition can be overcome simply by passing a law permitting such forced hospitality.

The fourth amendment gives the broadest indication of a right to privacy. Even so, it is not described as a right to privacy, and the protection it grants against unreasonable searches and seizures can be overcome fairly easily. The amendement states, "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."

Although the fourth amendment contains a specific reference to private property, that reference is only in the context of describing the process the federal government must follow to take it away: No one may "be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." The 14th amendment contains similar language and restricts (but does not eliminate) a state�s power to deprive people of their life, liberty, or property.

It is important to note that the Constitution�s limited recognition of a privacy right creates protections against invasions of one�s privacy only against the federal and state governments. The Constitution says nothing at all about a right to privacy against invasions by one�s neighbors, other private individuals, businesses, or the news media.

Thus the fact that the Constitution created some limited rights of privacy is clear evidence that a right to privacy did not exist in the common law when the Constitution was drafted. The right to privacy, as we understand it today, is a created right that began to evolve only during this century, following the 1890 publication of an article in the Harvard Law Review titled "The Right to Privacy." Under the still-developing modern view, the right to be let alone also includes the right to have one�s private affairs kept private. In her book, Law and the Life Insurance Contract, Muriel L. Crawford describes this right in the context of life insurance transactions as "the right to fair personal information practices."

As a right to privacy developed in American law throughout the 20th century, courts recognized different ways in which that right might be violated. Invasion of privacy is the term used in the law to describe a violation of one�s right to be let alone. Violation of a person�s rights by another person is known as a personal injury or a tort. Our legal system currently recognizes four different torts under the heading "invasion of privacy."

The first tort is misappropriation of another person�s name or likeness for one�s own commercial or other benefit without that person�s consent. Using someone�s photograph or name in an advertisement is the usual example of this violation. It is possible that an insurance producer may commit this tort if he or she uses a prominent client�s name as an endorsement of the agent�s products or services without that client�s permission.

The second invasion of privacy tort is an unreasonable intrusion into one�s private space�one�s home or apartment, work (in some cases), or wherever one has created an expectation of privacy. This tort also applies to invasions of one�s temporary private use of otherwise public space�for example, a wiretap on someone�s telephone conversations. However, if a person has no expectation of privacy, there can be no invasion. For example, a participant in the New York Marathon has no cause of action if a photographer takes a group picture of participants and spectators at the starting line and sells it to a magazine for publication. Another defense to this tort, and to invasion of privacy torts in general, is available to the mass media if the person is a newsworthy public figure. The media have a right to publish photographs and stories about permanently or temporarily newsworthy people.

The third version of the invasion of privacy tort is public disclosure of private facts. Insurance companies and producers have considerable amounts of personal, private information about their clients. Some of this information�especially about clients whose applications for insurance have been declined or who have been issued rated policies�may be embarrassing if it becomes public knowledge. Insurers should rigorously guard this information against unauthorized disclosure.

Note that this third version of the tort involves publication of facts, not opinions. Publication of one�s opinion, whether good or bad, about another person is not an invasion of his or her privacy unless it is accompanied by the publication of private facts. Similarly, publication of inaccurate statements (not facts) about someone does not meet the elements of this tort even if the statements are slanderous. In that event, the appropriate tort is defamation, not invasion of privacy. Note that while truth is an absolute defense in a defamation lawsuit, it does not relieve the defendant of liability in a lawsuit based on invasion of privacy.

The final version of this tort occurs when a person by word or action places another person in a false light in the public eye. In 1949 it was held that Hearst Magazines had committed this tort when it published the picture of an honest waiter to illustrate a story about dishonest waiters.

Theoretically, the information revealed does not have to be unfavorable in order to meet the definition of a tort. Suppose, for example, that Sue is a wealthy, reclusive author with no charitable interests whatever. Sue requires anonymity in order to do research for her books. Suppose further that John publicizes Sue�s photo and address widely, telling the public that Sue is a wonderful, charitable human being who is intent upon distributing $1 million in cash to homeless people. The information John publishes may well improve Sue�s public image, but it is certainly a false light, and the result may well be an unreasonable invasion of her privacy.

For purposes of the life insurance industry, two defenses to invasion of privacy torts are extremely important. The first defense is consent. If the insurer or producer can establish that the complaining party consented to the release of the private information, there should be no recovery. The second defense is the assertion of a privilege to seek out and use otherwise private information. The law permits certain persons a limited right to investigate the lives of others to further those persons� legitimate interests. For example, prospective employers have a limited privilege to investigate potential employees� claimed experience and education.

Insurance companies use both defenses to avoid invasion of privacy lawsuits and to defend against those they cannot avoid. To avail themselves of these defenses, insurers include notices in their applications for life insurance policies specifying that they may investigate an applicant�s background. Insurance companies ask the applicant to consent to the investigation, to the use of information gained thereby, and to the release of medical information from the Medical Information Bureau (MIB). Sample language is as follows:

The applicant or initial owner is asked to sign this statement. If the insured is someone other than the applicant, then the insured is also asked to sign the statement.

In addition to the above statement, applications contain notices such as the following, which are given to the insured or applicant at the time the application is completed:

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Some companies provide the following additional notice for applicants in selected states:

The above disclosure notices are merely samples; the actual language companies use varies considerably from contract to contract. The language of the notices also varies, in some cases, depending on the state in which the applicant resides. Once this information has been communicated to the applicant and insured, the insurance company may begin to investigate the proposed insured�s background to determine whether it wants to accept his or her application for insurance.

Insurers� investigative practices are controlled primarily by a federal law known as the Fair Credit Reporting Act and at the state level by the several states that have enacted local laws based on that act. When the state and federal laws differ, the state version usually extends additional rights to the general public or further limits the powers of credit-reporting agencies. A minority of the states have also adopted local versions of the NAIC�s model privacy act, which is formally known as the Insurance Information and Privacy Protection Model Act.

During the 1960s, the United States Supreme Court announced several decisions that began to formalize a right to privacy against encroachment by state and federal authorities in certain limited circumstances. In response to public concern about the growing ability of private companies (primarily credit-reporting agencies) to use computers to collect and retain information about people, Congress created statutory protection of the public�s right to privacy from these companies by enacting the 1970 Fair Credit Reporting Act.

The act enforces the privacy rights it creates by controlling the activities of consumer reporting agencies, which are defined as any entity that is in the business of preparing consumer reports or investigative consumer reports. The law applies to commercial agencies, which compile such reports and sell them to others for profit, as well as to cooperative nonprofit agencies such as the insurance industry�s Medical Information Bureau. Interestingly, the Fair Credit Reporting Act protects only those consumers who are "natural persons" (people). It does not extend any privacy rights to businesses.

The purpose of the act is to require consumer reporting agencies and those who employ them to acquire, maintain, and report the collected information in a fair and impartial manner. The act specifies two kinds of reports that are subject to regulation: consumer reports and investigative consumer reports.

Section 603(b) of the act defines a consumer report as "any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer�s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living" when collected for the purpose of evaluating the consumer for the extension of credit, for prospective employment, or to determine the person�s insurability.

Section 603(e) of the act defines an investigative consumer report as a consumer report "obtained through personal interviews with neighbors, friends or associates of the consumer reported on, or with others with whom he is acquainted . . . ." The definition also includes interviews with any person who may have knowledge about the consumer being investigated.

The following are some of the numerous limitations and obligations the Fair Credit Reporting Act imposes on consumer reporting agencies and the persons who use them:

Some states have protected privacy rights through a collection of unrelated state laws. These laws focus on protecting personal privacy in areas such as state tax returns, adoption records, business and state employment personnel records, juvenile court files, and medical records, among others. Recently, some states have enacted special legislation designed to reinforce the confidentiality of medical records with respect to certain diseases, notably HIV (AIDS). With the exception of laws governing the confidentiality of medical records, these laws do not generally have a particular application to the insurance business. Nevertheless, insurers need to be aware of the variety of state laws that protect the privacy of applicants and insureds.

In 1979 the NAIC adopted a model privacy act�the Insurance Information and Privacy Protection Model Act. The model act is similar in purpose, and in many of its requirements, to the federal Fair Credit Reporting Act except that the NAIC Model Privacy Act is a state law and focuses solely on information gathered for the insurance industry, whereas the Fair Credit Reporting Act is applicable to many types of consumer reporting.

Like the Fair Credit Reporting Act, the model privacy act tries to minimize the intrusiveness of personal investigations and balances the insurer�s need for personal information with the applicant�s desire for confidentiality. The model act also gives people the right to discover and have access to the information that has been collected about them. It grants people the right to dispute the accuracy of collected information and requires information-collecting agencies to verify their information when the person being investigated disputes it. It also severely limits how the collected information can be disclosed. Finally, if an adverse underwriting decision is made based on information collected in the report, the model act permits the applicant or insured to learn the reason for the decision and the source of that information.

The NAIC has updated and revised the act several times, but only a small minority of states have adopted it. A larger number�but still only a minority of state jurisdictions�have privacy acts of any kind. Nevertheless, understanding the model act is important because most insurers comply with its requirements regardless of where an insurance policy may have been sold.

A summary of the model act�s more important provisions is as follows: