Agent Groups Ask Regulators To Clarify Privacy Requirements
The initial rush to put privacy guidelines in place to comply with a 1999 financial services law is over and efforts are now turning to refining and clarifying these requirements.
Agents shared their concerns at a recent public hearing held to discuss what states still need to do to polish privacy guidelines now in place. The meeting was held by the National Association of Insurance Commissioners.
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The Gramm-Leach-Bliley Act of 1999 required privacy standards to be created within a year after its enactment, but regulators pushed back the effective date for insurers to July 1, 2001 to permit substantive work to be done.
Agent groups–including the National Association of Insurance and Financial Advisors, Falls Church, Va.; the National Association of Professional Insurance Agents, Alexandria, Va.; and the Independent Insurance Agents of America, Alexandria, Va.–sought clarification on the breadth of a producer exemption in a draft regulation being used as a template in many states.
In particular, they asked regulators to create consistent treatment for independent agents. One element of the exemption says the exemption exists if “the licensee does not disclose any nonpublic personal information to any person other than the principal or its affiliates.”
The agent groups also asked for guidance over how customer information should be treated when an independent agent “shops a policy” to a number of carriers.
In a separate letter, the National Association of Health Underwriters in Arlington, Va., argued similar points, noting the burden that would result if independent agents had to provide every client with the same notifications and authorizations required of an insurance carrier.
NAHU said that unlike insurers who can raise premiums to offset compliance costs, producers receive set commissions for their work.
Matthew All, assistant commissioner with the Kansas insurance department, says regulators want to balance the practice of shopping a policy and the fact that consumers may want that service with the desire to know how private information is being treated.