NAII Speaks Out Against Washington Privacy Proposal

February 1, 2001

As part of a Washington coalition of insurers, banks and retailers, the National Association of Independent Insurers spoke out against a privacy bill that the organization maintains would exceed the federal standard of Gramm-Leach-Bliley.

NAII local counsel Melvin N. Sorensen, one of the three co-chairs of the Association of the Washington Business Privacy Task Force, echoed the bank and retailer interests in expressing concern and opposition to SB 5503, a bill designed to establish standards for information collection and distribution by financial institutions. Sorensen’s comments centered on the fact that in its current form, SB 5503’s privacy standards are inconsistent with those established by federal GLB and its related rules.

Although GLB provides an opportunity for consumers to “opt out” of information collection and distribution activities, S.B. 5503 requires consumers to “opt in,” a requirement that is more onerous for both consumers and financial institutions. The opt-in provision, which exceeds GLB requirements, requires financial institutions to obtain prior consent of their customers (opt-in) each and every time before disclosing their information to non-affiliated third parties for marketing purposes.

Although both provisions provide consumers with the same degree of control over disclosure, opt-in is more costly and difficult to implement. The panel was preceded by testimony from Washington Attorney General Christine Gregoire, whose spoke out in support of SB 5503.

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