The National Association of Independent Insurers (NAII) has been named to a National Association of Insurance Commissioners’ (NAIC) task force to develop an example that insurance companies can use when sending privacy notices to policyholders.
NAII Insurance Services Counsel Kathleen Jensen is one of nine insurance industry professionals that comprise the NAIC’s Privacy Notice Content Task Force. The task force will begin meeting this month to craft sample language regarding an insurance company’s use of policyholders’ personal financial information.
“NAII welcomes the opportunity to participate on the NAIC task force to assist companies in better communicating with policyholders on privacy options,” Jensen said.
Many insurance regulators and others in the industry have expressed concern that customers are having difficulty understanding the initial privacy notifications, a requirement under the 1999 Gramm-Leach-Bliley (GLB) Act. Under the act, all financial service entities must notify their customers if they plan to use their personal financial data for marketing, mailing lists or other pursuits. Most of the statements give customers the choice of “opting-out” of information sharing by signing off on the statement within 30 days.
The sample notice language that is written and approved by the NAIC working group will be advisory in nature. Companies would still have a choice about keeping its own privacy language as long as it complies with the provisions of the GLB Act, Jensen said.
“Many insurance companies have already developed and mailed privacy notifications to customers,” Jensen said. “The goal of assisting companies in their communications should include the flexibility of allowing companies to decide what is the best ‘standard’ language for them without creating a scenario that sets up a privacy notification standard that must be utilized by all companies.”
The NAIC Privacy Working Group will review the task force’s sample language once drafted before the NAIC endorses the language.