The Alaska Division of Insurance’s proposed regulations regarding privacy of consumer financial and health information, while improved from the original proposal, are still not in sync with state law, according to the Alliance of American Insurers.
Rey Becker, vice president of property/casualty for the Alliance, commended the Division for following earlier advice from the Alliance and abandoning its earlier “opt-in” approach. “In the four years since Congress enacted the Gramm-Leach-Bliley (GLB) Act, only four states, California, New Mexico, North Dakota, and Vermont, have used that ill-advised approach.”
Nevertheless, the written comments submitted by the Alliance for yesterday’s hearing still oppose the proposed regulations. “The regulations deviate from both Title V of GLB and from the model developed by the National Conference of Insurance Legislators (NCOIL), and endorsed by the Alaska Legislature in 2001. He cited the following specific issues:
· GLB and the NCOIL model do not apply to commercial lines. However, like the 2000 NAIC model, this version would explicitly apply to workers’ compensation.
· GLB and the NCOIL model do not apply to third-party claimants. However, like the NAIC model, this version applies to all claimants.
· This version would create a consumer right of access and correction not present in GLB or the 2000 NAIC model privacy regulation.
· GLB and the 2002 NAIC model information safeguarding regulation apply only to information about customers (i.e. policyholders). This version would apply more broadly to information about consumers (i.e. applicants and claimants) as well.
“We’d like to work with the Division to improve certain aspects of the proposed regulations, because we believe the Alaska-only approach is very counterproductive,” said Becker. “These deviations from GLB and NCOIL, particularly as concern information safeguarding, run counter to the goals of regulatory modernization and uniformity, providing an unfortunate example for those urging federal regulation of the insurance industry.
“These additional mandates and restrictions, particularly as to information safeguarding, will serve to place insurers at a competitive disadvantage compared to banks and securities firms, that face no such federal burdens in Alaska. These additional mandates and restrictions will create costly barriers for insurers wishing to write business in the state. When taken together, these will translate into fewer choices and higher premiums for the insurance consumers of Alaska.”
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