NAII Favors Adoption of MA Bill on Privacy Regulations

April 23, 2003

The National Association of Independent Insurers has issued a bulletin in favor of a Massachusetts bill giving the insurance commissioner authority to promulgate privacy regulations consistent with the federal Gramm-Leach-Bliley (GLB) law.

The NAII indicated that the bill would simplify the establishment of privacy regulations and would “avoid many of the problems associated with adopting a ‘model’ bill.” Gerald L. Zimmerman, NAII senior counsel, said, “H.B. 1701 avoids some of the problems, complexities and controversies associated with adopting ‘model’ privacy bills, such as the bill developed by the NAIC. By giving the commissioner the authority and direction to develop privacy rules applicable to all insurers for financial privacy only, the bill would guarantee consistency with the GLB law regarding privacy.”

At a recent hearing on the bill before the Joint Insurance Committee, NAII noted that this approach would ensure a level playing field between insurers and other financial institutions by providing that the rules for insurers are no more rigorous than those faced by banks and similar entities.

“It also avoids the problems that can occur when such broad privacy laws interfere with normal claims adjustment, such as a situation that occurred in Hawaii where the privacy law prevented adjustment and payment of workers’ compensation claims, and the privacy law had to be suspended,” the bulletin concluded.

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