PIANJ Provides Input to DOBI on Privacy Safeguards

May 9, 2003

The Professional Insurance Agents of New Jersey Inc. announced that it had recently provided input to the New Jersey Department of Banking and Insurance (DOBI) on its proposed new rules establishing standards for insurers and producers for protecting non-public customer information.

The new rules were developed to implement the privacy provisions of the 1999 Gramm-Leach-Bliley Act. In a letter to Assistant Commissioner Douglas A. Wheeler, the PIANJ said it supports the protection of privacy and confidentiality of customers’ non-public information, but expressed some concerns about technicalities within the DOBI’s proposal.

“PIANJ appreciates the opportunity to comment and applauds the department proposing these important rules,” stated PIANJ President David Madara, CPCU, AAI. “We certainly support measures to protect privacy and confidentiality of customers’ non-public information.”

The PIANJ recommended some amendments to the proposal “to make it track more closely with the National Association of Insurance Commissioners’ model, upon which the proposal is based.” It suggested that certain mandates in the proposal be changed to “examples” of methods a producer could implement to satisfy his/her obligations to establish safeguards to protect the confidentiality of information. “This is the NAIC model approach, which provides more flexibility to a producer to tailor a particular security program,” said Madara.

The proposal presently requires producers to take various steps to: “(1) assess risks of threats to the confidentiality of information; (2) manage and control risks of disclosure of nonpublic information; (3) oversee service provider agreements: and (4) monitor, evaluate and adjust its security program,” said the PIANJ’s bulletin.

It also questioned the practicality of other requirements in the proposal. “We appreciate the goal of these safeguards, however PIANJ wants to help the DOBI ensure that well-intended regulation does not impose unrealistic requirement upon producers,” Madara indicated.

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