NAIC Privacy Project Has Insurers Concerned Over Many Issues
Insurers say they want to continue discussions with regulators regarding a market conduct examination initiative that would look at compliance with privacy requirements in the Gramm-Leach-Bliley Act of 1999.
Trade groups representing insurers say they have had discussions with regulators, including District of Columbia Director Larry Mirel.
Regulators are engaged in an ongoing process to streamline the market conduct examination system to make state regulation more efficient and say this project is part of that effort.
The first round of a planned four-part round of surveys was distributed to insurers at the start of the month. The subject of the surveys could be raised when the National Association of Insurance Commissioners, Kansas City, Mo., meets next month in Chicago for its fall meeting.
As functional regulators, insurance commissioners need to know that there is compliance with GLB, says Bruce Ferguson, senior vice president, state relations, with the American Council of Life Insurers, Washington.
However, “the execution of the concept is where the problems surface,” he continues. “It is one of the first tests in a post-Gramm-Leach-Bliley world as functional regulators.”
Issues that insurance trade groups say are concerns include the lack of regulatory uniformity among the states, the uncertainty over reciprocity, cost and protection of proprietary information.
One issue is how to conduct a national market conduct exam based on standards that differ, Ferguson adds. For instance, he explains, some states have privacy standards that include health privacy requirements while other states have standards that solely address financial privacy.
Another issue of concern to companies is that the survey contains questions asking for proprietary information such as the security features of the computer system, Ferguson says.