Any effort by states to modernize insurer data privacy standards should not displace the federal standards already in place for depository institutions, the American Bankers Association said in a letter to the National Association of Insurance Commissioners.
NAIC has proposed updating its model regulations governing insurer data privacy standards, which states are free to adopt as their own standards. In its letter, ABA said that while it supports modernizing state privacy standards, Congress already codified federal standards for depository institutions and their affiliates through passage of the Gramm-Leach-Bliley Act.
“The statute does two things at once: it preserves state insurance regulation while providing that no state may, by statute, regulation, order, interpretation or other action, prevent or significantly interfere with the ability of a depository institution or an affiliate to engage in insurance sales, solicitation or cross-marketing,” ABA said.
The association urged NAIC to add an express savings clause to the model that preserves the federal framework. “Preserving that framework protects state regulatory authority while avoiding unnecessary restrictions on lawful competition, consumer choice, and the ability of banks to offer insurance products,” it said.
