California Assembly Passes Web Privacy Bill

Tena Friery, research director with the Privacy Rights Clearinghouse, San Diego, says the draft regulation should offer protections that are consistent with Gramm-Leach Bliley.

Consistency is also a high priority for the American Council of Life Insurers, Washington, says John Mangan, director of state relations. A chief concern, he says, is uniformity among states. "We are very much concerned that there not be separate notices."

Sam Sorich, senior vice president and general counsel with the National Association of Independent Insurers, Des Plaines, Ill., says the latest draft consists of revisions that are both good and bad.

Pluses that Sorich cites include a change in the definition of "customer" to make it clearer that the word refers to an ongoing relationship. Annual privacy notices would be sent to those customers with an ongoing relationship, he explains.

The time frame for allowing customers to opt out of sharing of personal information was changed to 30 days from 45 days and is now more consistent with a privacy model, the Privacy of Consumer Financial and Health Information model regulation, that was adopted by the National Association of Insurance Commissioners, Kansas City, Mo., Sorich says.

But Sorich still has problems with the draft. For example, the issue of providing an opt-out notice to customers if an agent or broker shops a policy for a better policy is not addressed, he says.

Sorich also says that an article in the draft addressing safeguarding of private information by carriers should be held until it is evident what action the NAIC is going to take. Currently, the NAIC is working on rules for protecting private information.