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March 19, 2006 at 03:00 PM
The House Financial Services Committee is considering legislation that would establish a national standard on data security, but at press time it appears unlikely that it will act before a scheduled recess.
Several Senate committees also are working on similar legislation. The Senate Banking Committee, among other panels, is drafting a bill, but it is unclear when the bill will be unveiled and acted on in that committee.
The House bill, introduced last October, would bar states from imposing their own standards but would at the same time mandate that state regulators enforce the standards as they relate to insurance companies.
That issue is critical to supporters of continued state regulation of insurers and was accepted by the committee leadership despite efforts from some corners of the industry to have the Treasury Department or the Federal Trade Commission oversee insurance industry compliance with the law.
The bill, introduced with bipartisan support, would safeguard sensitive consumer information, fight identity theft and create a uniform standard for notifying consumers of data breaches.
When it was introduced, the National Association of Mutual Insurance Companies, Indianapolis, said it would support the bill, which it called “a reasonable attempt to address consumers’ concerns about identity theft in a way that reflects the practicality of business operations.”
Data security is becoming a priority in Congress, especially since the records of several credit card processing companies were breached during the summer.
