Federal banking and securities regulators have worked with the National Association of Insurance Commissioners to adjust a new privacy form to fit the needs of insurers.
The regulators developed the “Final Model Privacy Form” to implement provisions of the Gramm-Leach-Bliley Financial Services Modernization Act of 1999.
The list of agencies that worked on the model includes the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the National Credit Union Administration, the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Federal Trade Commission.
The agencies developed the model form to implement Section 728 of the Financial Services Regulatory Relief Act of 2006, which calls for the federal government to create a model privacy form that financial institutions can use as a safe harbor.
Participating agencies other than the SEC are eliminating safe harbor relief that they were providing through the “Sample Clauses” now contained in the privacy rules. The Sample Clause safe harbors will stop protecting notices that sail out after Dec. 31, 2010, officials warn in a discussion of the form, which appears on the SEC website.
Similarly, the SEC will be eliminating the guidance associated with the use of notices based on the Sample Clauses in its privacy rule for notices provided after Dec. 31, 2010.
Even after Dec. 31, 2010, financial institutions “may continue to use other types of notices that vary from the model form so long as these notices comply with the privacy rule,” officials write.
Several agencies began working on a privacy notice program in 2004, and the published a draft form in March 2007.
As part of the process, the agencies hired a research firm to survey 1,000 consumers by stopping them at shopping malls in Baltimore, Dallas, Detroit, Los Angeles and Springfield, Mass., in March and April 2008, and getting their reactions to 4 different types of privacy forms.
One of the versions was a form developed by Kleimann Communication Group Inc., x, for the agencies, and another was a form commonly used by financial institutions, officials write.