States Probe Massive Data Breach at Health Insurer Anthem

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2nd Largest U.S. Health Insurer Anthem Hacked

By Karen Freifeld

NEW YORK -- Several U.S. states are investigating a massive cyberattack on No. 2 U.S. health insurer Anthem (ANTM) that a person familiar with the matter said is being examined for possible ties to China.

Anthem disclosed the attack late Wednesday, saying unknown hackers had penetrated a database with some 80 million records. The insurer said it suspected they had stolen information belonging to tens of millions of current and former customers as well as employees.

Attorneys general of Connecticut, Illinois, Massachusetts, Arkansas and North Carolina are looking into the breach, according to representatives of their offices and internal documents. California's Department of Insurance said it will review Anthem's response to the data attack.

%VIRTUAL-pullquote-We hope and expect to work in close coordination with other attorneys general.%Connecticut Attorney General George Jepsen asked Anthem Chief Executive Officer Joseph Swedish to provide by March 4 detailed information about the cyberattack, the company's security practices and privacy policies, according to a letter obtained by Reuters on Thursday.

"We hope and expect to work in close coordination with other attorneys general," said Jaclyn Falkowski, a spokeswoman for Jepsen.

A source familiar with the probe told Reuters that a possible connection to China was being investigated, and the Wall Street Journal reported that people close to the investigation say some tools and techniques used against Anthem were similar to ones used in previous attacks linked to China.

The origin of cyberattacks is difficult to determine, China's Foreign Ministry spokesman, Hong Lei, said Friday.

"Such careless identification of the relevant attacker clearly is unreasonable," Hong told a news briefing in Beijing.

Ongoing Investigation

Late Wednesday, the FBI said it was looking into the matter but didn't discuss suspects.

"As far as China being involved, I don't know," said FBI spokesman Paul Bresson. "I don't think we know yet. Our investigation is ongoing."

On Friday, Anthem officials are scheduled to brief the House Energy and Commerce Committee on the breach.

"This latest intrusion into patients' personal information underscores the increasing magnitude and evolving nature of cyber crimes," Fred Upton, the committee's chairman, said in a statement. "Every business is at risk and American consumers are anxious."

President Barack Obama's cybersecurity adviser, Michael Daniel, speaking at a seminar in Washington, called the data breach "quite concerning" and warned consumers to change their passwords and monitor their credit scores.

Connecticut has worked with other states to investigate some of the biggest U.S. data breaches reported to date, including ones at retailers Target (TGT) and Home Depot (HD). The office of Connecticut's attorney general said Anthem has agreed to two years of credit monitoring for customers there.

A representative for New York Attorney General Eric Schneiderman declined to say whether he planned to work with Connecticut but noted his office had contacted Anthem to discuss protecting its customers in the wake of the data breach.

A representative with FireEye (FEYE), which was investigating the attack on behalf of Anthem, declined comment.

-With additional reporting by Caroline Humer, Jim Finkle, Joseph Menn and Deena Beasley, and Michael Martina in Beijing.
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