Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Regulation and Compliance > State Regulation

ACLI Planning To Sue Vermont

By Jim Connolly

X
Your article was successfully shared with the contacts you provided.

NU Online News Service, Jan. 8, 12:43 p.m. – The American Council of Life Insurers, Washington, is suing to overturn Vermont privacy regulations, according to Victoria Fimea, senior counsel-litigation.

ACLI will file the suit in state superior court in Washington County during the week of Jan. 14, Fimea says.

Other life insurance, property-casualty and health insurance organizations have expressed interest in joining the suit, but none has made a definite commitment, Fimea says.

The ACLI suit will address whether the Vermont Legislature has given Elizabeth Costle, commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration, the legal authority to establish an “opt-in” provision in the Vermont privacy regulation.

The suit will also contend that the Vermont privacy regulation goes beyond what is required in the Gramm-Leach-Bliley Financial Services Modernization Act of 1999.

An opt-in provision requires insurers to get the active permission of customers before sharing information. An insurer might, for example, ask a customer to check a box allowing the insurer to share information.

Vermont now imposes an opt-in requirement on insurers that want to share information on matters such as creditworthiness and personal characteristics with other, non-affiliated companies.

The Vermont department says it established the opt-in provision to make standards for insurers similar to those set for banks, but ACLI argues that Vermont should follow the example set by other states and adopt on “opt-out” provision for personal financial information.

An opt-out provision would require a customer opposed to sharing of information to take active steps to get out of any information-sharing arrangements.

If an opt-out provision were in effect, an insurer would automatically be able to share information, unless a customer checked a box, wrote a letter, or took some other action to prevent sharing of information.

Depending on court dockets, the ACLI suit could take about a year to move through the judicial process, Fimea says.

ACLI is watching closely as California establishes its privacy guidelines, but the group has not decided whether to file suits in states other than Vermont, Fimea says.

The decision to sue is based entirely on the ACLI understanding of Vermont laws and not on any personal disagreement with Vermont regulators, Fimea notes.

In fact, the ACLI is now in contact with the department to seek guidance on how to meet the requirements of the regulation, Jack Dolan, an ACLI spokesman, says.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.