Close Close
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
ThinkAdvisor

Regulation and Compliance > State Regulation

Insurance Groups Eye California Privacy Measures

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

NU Online News Service, Feb. 27, 6:43 p.m. – The California Department of Insurance hopes to release a new draft of its proposed privacy regulation in April.

The American Insurance Association and the American Council of Life Insurers, both of Washington, are two of the insurance trade groups asking for changes.

AIA objects to the current version of a section describing insurers’ duty of confidentiality and care, because the current language would give individuals the right to sue insurers over breaches of the standard.

ACLI is objecting to the current draft privacy notice, which states that an applicant could proceed with an application without having to share medical information. ACLI feels the language is not acceptable, according to John Mangan, ACLI’s state relations director.

ACLI is also asking for changes in the number of privacy notices that insurers would use. The California department has been talking about use of a single notice for applicants and current customers.

The notice would include the general privacy notice required by the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which would be the same as the notice sent in states that adopted the minimum Gramm-Leach-Bliley standards. The notice would also include information about California’s own, special privacy rules for medical information.

ACLI wants insurers to be able to send two notices. One, which would go to all customers, would be an annual notice that would consist of the standard Gramm-Leach Blilely notice. New applicants would get a separate, initial notice that would spell out California’s medical information privacy rules, Mangan says.

Meanwhile, ACLI, AIA and other groups are also tracking state privacy bills.

Two high-profile bills now before the California Legislature are Senate Bill 773, introduced by state Sen. Jackie Speier, D-San Francisco, and Assembly Bill 1775, introduced by Assemblyman Joe Nation, D-San Rafael.

S.B. 773, which faces opposition from insurers and other financial services entities, would require that a financial institution receive prior customer approval before giving confidential customer information to a non-affiliated third party. The Speier bill has already passed the California Senate and is now in the Assembly.

Speier recently publicized a poll commissioned by E-Loan Inc., Dublin, Calif., that found that 91% of state residents surveyed support S.B. 773. E-Loan and another California financial services company, Silicon Valley Bank, Santa Clara, Calif., have come out in support of the bill.

More information about A.B. 1775 is available at http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=ab_1775&sess=CUR&house=B&author=nation

Information about S.B. 773 is available at http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sb_773&sess=CUR&senate=B&author=speier


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.