NU Online News Service, May 7, 11:05 a.m. — Washington
Life insurance companies are strongly opposing an Internet privacy bill that they say could effectively destroy online sales of insurance.
The legislation, S. 2201, was introduced by Senate Commerce Committee Chairman Ernest F. Hollings, D-S.C., and could be “marked up” — voted on by the committee — as early as the week of May 11.
The legislation would establish strict rules governing the collection and disclosure of “sensitive” personal information?including name, address, phone number, health, race, political party, religious belief, sexual orientation, Social Security number or financial data?by Internet service providers or operators of commercial Web sites.
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Under S. 2201, Internet service providers and commercial Web site operators would be barred from collecting or disclosing personal information from users unless they provide “clear and conspicuous notice” to the users.
Providers and Web site operators would have to obtain the users’ consent before collecting and disclosing information about health, race, and other “sensitive” issues.
In addition, S. 2201 requires providers and operators to give users “robust” notice of the opportunity to opt-out of information gathering and to give users access to all the personal information about them.
The legislation would allow private lawsuits against providers and operators for violations of the act, in addition to vesting the states and the Federal Trade Commission with enforcement authority.
In recent testimony before the Commerce Committee, John C. Dugan, an attorney representing the Financial Services Coordinating Council, Washington, said S. 2201 would have a disproportionate impact on financial institutions.
In effect, he said, the legislation creates an opt-in standard for sensitive information. While this is not an issue for most types of businesses, Dugan said, it is central to the business of insurance companies, banks and securities firms.