The American Insurance Association (AIA) hailed the beginning of a new era in consumer privacy protection, confirming that insurers already have measures in place to comply with the new privacy regime resulting from the Gramm-Leach-Bliley Act (GLBA). This new federal law provides the most extensive consumer privacy protections in U.S. history.
In recent weeks consumers have been receiving privacy notices from their insurers and the other financial institutions with which they do business. The AIA urges consumers to carefully read these notices so that they will be aware of their rights under the new law. As consumers read these notices, they will discover several important protections. For example:
• Customers will receive annual notices informing them of their insurers’ information-handling practices and reminding them of their rights.
• Customers who wish to “opt-out” of having their personal financial information shared with a non-affiliated third-party for marketing purposes can do so.
• Customers must give affirmative approval to an insurer before their medical information can be used for marketing purposes.
Insurers also have in place new standards that protect the security and confidentiality of non-public personal information. Financial institutions, including insurers, may not disclose account numbers or other access information to third-party marketers.
Thirty-nine jurisdictions have privacy rules in place, or in the pipeline to conform with GLBA privacy standards. Seven of the remaining 12 states have the 1982 NAIC model in place. The remaining five states are expected to release GLBA privacy regulations shortly.
The AIA, representing more than 370 major insurance companies that provide all lines of property/casualty insurance and write more than $77 billion annually in premiums, is headquartered in Washington, D.C. AIA press releases are available at www.aiadc.org.
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