Agents and Brokers were notified recently that they are required to comply with consumer privacy portions of the Gramm-Leach-Bliley Act (GLBA) despite the failure of a bill in the California legislature. Congress enacted the GLBA in 1999, modernizing the regulation of financial services by removing barriers between insurers, banks and security houses. The GLBA imposes new privacy requirements on businesses, including insurance agents and brokers. These federal regulations require compliance by July 1, 2001.
A related bill in the California Legislature (AB 1727), which would have implemented portions of the GLBA, recently stalled in the Legislature and won’t be considered until next year. Agents and brokers were cautioned this week however that the bill’s status does not release GLBA compliance requirements.
IBA West General Counsel Steve Young explained that among other things, the regulations require virtually all independent agents and brokers — by July 1 — to notify their customers of the firm’s privacy policies, and give them the right to withhold permission to convey “non-public personal information” to unaffiliated companies. With limited exceptions, the regulations require insurance producers: 1) to develop privacy policies and practices; 2) to notify all customers of those policies and practices; 3) to notify customers of the circumstances under which the agency or brokerage might disclose “non-public personal information” about the customer to third-parties (such as insurance companies); and 4) to provide customers the opportunity to “opt out” of such disclosures.
Because the regulatory requirements are lengthy and complex, IBA West has joined with other groups to sponsor workshops (with 2 CE credits) in California, Hawaii, Nevada and Washington. These workshops will help producers understand the ramifications of, and comply with, the GLBA and related federal laws.
More information on the courses is available by visiting www.ibawest.com.
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