Insurers Weigh Legal Challenge To Vermont Privacy Regulation

The American Council of Life Insurers, Washington, says a preliminary decision has been made to legally challenge the decision. Among the options that need to be considered are whether the challenge would be in federal or state court. If a challenge is pursued, it would seek a temporary restraining order or an injunctive relief.

At press time, the American Insurance Association, Washington, was scheduled to hold a conference call for members, to determine whether to pursue a lawsuit. The Alliance of American Insurers in Downers Grove, Ill., is still weighing the issue.

The National Association of Independent Insurers in Des Plaines, Ill., would rather seek a compromise with Vermont than pursue a suit, says Jerry Zimmerman, NAII senior counsel. He says the regulation would impose a different health notice than a required national notice if health data was collected.

The department does not have authority to enact such a regulation and the concern is that it could exceed its authority again in the future, Zimmerman says. Enabling legislation that would give the department the right to enforce its privacy regulation could be a solution, he says.

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 3, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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