Nationwide Mutual Insurance Co. will pay $5.5 million to 32 states as part of a settlement to resolve allegations the company's failure to apply a security patch contributed to a 2012 data breach, USA Today reports.
Here are five things to know about the settlement.
1. In 2012, computer hackers executed a data breach that compromised information from roughly 1.27 million individuals who had applied for Nationwide's insurance plans. The compromised information included Social Security numbers and driver's license data, among other information used for insurance quotes.
2. Following the incident, Nationwide offered affected individuals one year of free credit monitoring and identity fraud protection services through a third-party vendor. The company also suggested individuals place a security freeze on their credit reports, although Nationwide did not offer to pay for these expenses.
3. The attorneys general of 32 states alleged although the data breach was the result of outside hackers, Nationwide and an affiliate failed to apply a security patch designed to hinder these types of hacks.
"Nationwide demonstrated true carelessness while collecting and retaining information from prospective customers, needlessly exposing their personal data in the process," New York Attorney General Eric Schneiderman said in a statement about the settlement.
4. Under the settlement, Nationwide will "update its procedures for maintenance and storage of consumers' personal data, conduct regular inventories of computer system security patches and updates and take other steps to safeguard consumer information," according to USA Today.
5. The 32 states will share the $5.5 million and use these funds to address costs associated with investigation and litigation into the data breach. The states are also authorized to use the funds for programs like consumer protection law enforcement.
Click here to view the full settlement.