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Privacy Action In California Split

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NU Online News Service, Sept. 5, 11:47 a.m. – California’s state legislative session ended on Aug. 31 with one major privacy bill being killed and another heading toward the governor’s desk.

The highly controversial Senate Bill 773, a financial privacy bill sponsored by State Sen. Jackie Speier, D-San Mateo and Assemblyman Joe Nation, D-San Rafael, died in the final hours of the session. The bill’s definition of an affiliate and the opt-out provision that it would require, concerned insurers. For companies considered non-affiliates, an opt-in would have been required.

In the final hours of the session, the senate refused to agree to changes made in the assembly and the assembly voted down the bill in a 36-34 vote. Forty-one votes were needed to pass the bill.

However, another privacy bill, Assembly Bill 2297, was passed by a vote of 47-28. That bill addresses privacy policies on Web sites. It requires privacy policies to be posted and requires that notification be given if there is a breach of security on a Web site and confidential consumer information is accessed.

S.B. 773 was opposed by both life and property-casualty groups including the American Council of Life Insurers, Washington, and the Alliance of American Insurers, Downers Grove, Ill. Consumer groups and credit unions represented by the California Credit Union League, Rancho Cucamonga, supported it. CCUL supported an opt-out provision for third parties that would make it easier for small financial institutions to market products.

Opt-outs require a consumer to say that they do not want information shared. Opt-ins require a company to get a consumer’s consent before information can be shared.

A discussion of a voters’ initiative is being touted but would take time to develop and collect sufficient signatures to put on a ballot, according to interviews. The proposition may not reach voters until 2004, according to Speiers’ Web site,