According to a recent report, a malfunction in the Insurance Link system, an insurance industry database that contains historical customer information, has led to claims being wrongly associated with thousands upon thousands of customers. The database is not only used to house customer claim information, it also monitors claims to help prevent fraud.

Although some people worry that the error may have caused their premiums to increase, insurance companies will not be notifying people whose information was modified. Customers are also concerned that valid claims may not have been authorized due to the glitch.

Gary Davis, the deputy data protection commissioner, validated customer fears that the database failure could raise the cost of insurance for some people. The system was unable to differentiate between an inquiry and an actual claim, so anyone who had simply asked about his or her policy or requested a quote was showing up as having submitted a full claim.

And, of course, the more claims a person has, the more likely it is that the cost of that person’s insurance will be higher. It was determined that including information in the Insurance Link database that did not pertain specifically to claims is a violation of the law.

Although officials understand that the situation must be remedied, details about the processes necessary to make changes to the system have not been elaborated on. In fact, it is unclear whether any effort will actually be made to enforce changes. It may be possible that fewer people were involved in the error than initially estimated, although any investigations being conducted by the insurance industry have not been made public.

However, some companies have made efforts to fix the information in the database. The system showed more than two million records dealing with claims in November of last year. Thirty thousand of those involved inquiries for one insurance company that did not equate to actual claims. Once the company realized this information was included in the database, it was removed.

Some companies’ systems were unable to tell the difference between non-claim data and records pertaining to valid claims, though. This makes it difficult for insurance companies to accurately create pricing plans for customers. If they are unable to correctly evaluate a customer’s claim history, they are taking a shot in the dark when charging premiums. Although an investigation has been reported that this is not an isolated incident, the insurance industry has not confirmed that fact.