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March 17, 2006 at 07:51 AM
Members of the U.S. House Financial Services Committee voted 48-17 Thursday to approve H.R. 3997, a bill that could affect how insurers respond to breaches of customer data security.
The bill, the Financial Data Protection Act of 2005, continues to face attacks from some Democrats, who want to strengthen protections for individuals affected by breaches of data security.
The American Council of Life Insurers, Washington, also is expressing concerns about H.R. 3997.
H.R. 3997 does not provide a clear, preemptive standard for life insurers with respect to investigation and notice of security breaches, the ACLI says.
“Clarity and uniformity are vital in this area,” says ACLI Jack Dolan. “Unfortunately, the legislation may open the door to various approaches in the states to when investigations of potential data breaches need to be launched, and when consumers need to be notified. ACLI does not think it wise for consumers in one state to enjoy protections unavailable to consumers in another state.”
Variations in state data security rules could also raise costs for insurers, Dolan says.
