Dormant California Privacy Bill Revives

Opt-outs require consumers to say they do not want personal nonpublic information shared while an opt-in assumes information cannot be used unless a consumer is asked and gives permission.

The opt-out is important, according to Lowe, because it creates a level playing field for small institutions that may need to go to outside marketing sources rather than work among affiliates of a single, larger entity.

The bill's chances, says Bruce Ferguson, vice president-state relations with the American Council of Life Insurers, Washington, will depend on how moderate Democrats view an amendment to the bill that now requires an opt-out for joint marketing agreements rather than an opt-in. The new support of business groups could also play a factor, he explains.

Ferguson says ACLI is concerned because the bill "goes way beyond the parameters" of Gramm-Leach-Bliley.

Ferguson says other problems include a California-specific privacy notice that would have to be sent to consumers and which differs from requirements in GLB, and a model regulation of the National Association of Insurance Commissioners.

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 26, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.