The Principal Slips in an “Identity Theft Tax” on all their Brokers

I want to open this post with a statement that I think very highly of the Principal. I have a number of friends there and they have consistently been a top notch organization over the years with good products, people and service.

I got a copy of their new BA amendment for their brokers dated Thursday, 2/11/2010 –  6 days before HITECH Judgment day and likely arriving 3-4 days before it.

They had a year to communicate any changes or 6-8 weeks prior like many others did.  This trying to slip it in before the deadline is not consistent with this organization’s reputation but like others like Aetna and Cigna and many more.

This open ended penalty or “tax” is as egregious as Aetna’s absurd approach to this issue that we blogged about last week.

The really amazing thing is this paragraph that is neither required under HIPAA or HITECH so is arguably not legal.

So 6 days before the law’s changes go into affect Principal slides in a penalty for any “breach” that the broker is expected to pay whether there is any harm or not.

If you look here there are over 25 carrier BA agreements and NONE have a provision like this and neither do the laws et al that make up this HIPAA HITECH change for BA’s.

From what I can tell the Principal has done nothing to help their brokers understand these changes and how to get in compliance yet holds a penalty/tax over their heads for even breaches where no harm is proven. This “DADT” approach will NOT help them with OCR and HHS when a breach occurs.

This sounds to me like the sales and marketing folks were not involved in crafting this agreement and the legal team let loose with their fantasy agreement that is anti producer, anti sales and anti client retention… and not in keeping with the historical reputation of the Principal.

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