The American Bankers Association and five insurance industry associations on Friday expressed concerns about the proposed revisions to the National Association of Insurance Commissioners’ privacy protection models, saying that some of the revisions under consideration would radically change the privacy laws that insurers have been working under. They instead urged NAIC to expand on its existing model to incorporate aspects of privacy protection law that already exist in many states.
NAIC’s Privacy Protections (H) Working Group is exploring updating the standard-setting organization’s privacy protection models, which are used as the basis for state laws and regulations. In a joint letter, the associations urged the working group to discontinue work on one draft model that would make drastic changes to the existing requirements. “It threatens to introduce significant disruptions for consumers, regulators and industry players alike,” they said.
The groups suggested the working group instead amend NAIC’s existing model with an industry-supported draft proposal incorporating many existing, widespread aspects of state privacy law, with which financial institutions have already expended significant resources and implemented compliance procedures, and with which consumers have become familiar. “While they do have some differences, by and large these laws are similar and include many of the same components,” the associations said. “One message we have heard from regulators is a desire to essentially expand some of these new state requirements to the insurance industry, in a way that makes sense for and is relevant to our industry.”
