Not sure what's going on here but I have never heard of that security feature.
What you could do is to sign up for an Outlook.com email which you will have to do at some point as they phase Hotmail out. It will allow you to link your existing Hotmail address to it and all contacts etc and receive/reply to mail.
I know it's not 'fixing' the actual problem but it's what I would do.
Some information about phasing out of Hotmail and how to transfer to Outlook:
http://www.techrepublic.com/blog/windows-and-office/move-your-hotmailcom-account-to-an-outlookcom-account/