Privacy Regulations Continue To Evolve
A year after insurers began conforming to new privacy guidelines, privacy continues to concern both regulators and companies.
Privacy guidelines that put insurers in compliance with requirements under the Gramm-Leach-Bliley Act of 1999 became effective a year ago, on July 1, 2001.
Amendments are being considered for the Privacy of Consumer Financial and Health Information Regulation, a regulation adopted by the National Association of Insurance Commissioners in September 1999.
Additionally, regulators at the NAIC meeting here last month discussed a privacy regulation developed by the Department of Health and Human Services and how it compares with the NAIC Health Information Privacy Model Act. The issue was touched on by regulators but no decisions have been made on a direction to take concerning HIPAA privacy.
Currently, 36 states have promulgated regulations based on the latest NAIC model, while 13 states have laws based on the NAICs Insurance Information and Privacy Protection Model Act, from the early 1980s.
Regulators broached the amendments during a discussion at the privacy issues working group. During the discussion, insurers in the audience were assured that the proposed amendments were clarifications and not changes to the existing model.
The concern among insurers was an amendment requiring a notice to covered individuals. The amendment (Section 9-A(b)) says providing a notice to a covered individual is optional unless the individual is an insurers consumer or the individual requests a notice.
However, a section addressing the definition of consumer states that if an insurer provides notice to the plan sponsor or group policyholder or workers compensation policyholder, and does not disclose individual nonpublic personal financial information to a nonaffiliated third party, individuals would not be consumers because they would be covered by the group notice.
Insurers are assessing these amendments.
The American Council of Life Insurers, Washington, is still reviewing the working group proposals, says Jack Dolan, an ACLI spokesman.
The Health Insurance Association of America, Washington, opposes reopening the health privacy model because it does not want to see a model already in place in a number of states reopened, according to Joseph Luchok. However, on the amendments to the 1999 NAIC model, Luchok says that “we agree with the intent but we have not looked at the precise language.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 8, 2002. Copyright 2002 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.