What: The Gramm-Leach-Bliley Act (GLBA) regulations create unprecedented new obligations for insurance agents to adopt comprehensive privacy policies for handling customers’ personal information.
When: Among other things, the regulations require virtually all independent agents and brokers to notify their customers of the firm’s privacy policies by July 1, 2001, and give them the right to withhold permission to convey “non-public personal information” to unaffiliated companies.
The regulations require producers to do the “mass mailing” of the privacy policy and opt-out notice to all of their existing customers by July 1, to all new customers at the inception of such relationship, and then annually thereafter. Notices to mere consumers are required on a one-time-only basis only if producers might disclose “non-public personal information” concerning the consumer to an unaffiliated third party.
Who: All independent agents and brokers, insurers, and most financial institutions need to comply. Every insurance agency and brokerage is required to meet the requirements of these new regulations, unless exempted by a fairly narrow “agent exemption” that appears to apply mainly and only to “captive agents” who do not solicit competitive bids or shop policies on renewal.
The regulations apply only to information on individuals that is used for personal, family or household purposes; information regarding businesses is not covered by the regulations.
Likewise, information gathered in connection with commercial coverages (including D&O policies) is not covered by the requirements.
How: With limited exceptions, the regulations require insurance producers: 1) to develop privacy policies and practices; 2) to notify all customers of those policies and practices; 3) to notify customers of the circumstances under which the agency or brokerage might disclose “non-public personal information” about the customer to third-parties (such as insurance companies); and 4) to provide customers the opportunity to “opt out” of such disclsures.
Definitions: There are two distinct notice requirements that differentiate “consumers” from “customers.”
• Consumer: any individual having dealings with a broker-agent.
• Customer: someone with a specific or ongoing relationship with the broker-agent.
Resources: Because the regulatory requirements are lengthy and complex, IBA West has joined forces with Hawaii Independent Insurance Agents, Nevada Independent Insurance Agents, Insurance Skills Center and others to jointly sponsor workshops (with 2 CE credits) in California, Hawaii, Nevada and Washington.
These workshops aim to help producers understand the ramifications of, and comply with, the GLBA and related federal laws.
More info: Visit www.ibawest.com or www.niia.org or www.insuranceskillscenter.com to download a brochure.
Compiled by Steve Young, IBA West general counsel.
Topics Agencies Legislation
Was this article valuable?
Here are more articles you may enjoy.
Rising Prices, Low Satisfaction Drive 49% of Customers to Shop For New Auto Insurance 
Fla. Regulators’ Effort to Remove Insurer Execs May Not Pass Constitutional Muster 
Insurers Get Green Light to Pay Less Than Billed Charges in Florida PIP Cases 
Berkshire’s Jain on Cyber: ‘The Mindset Should Be You’re Not Making Money’ From This Issue
