According to the San Francisco Chronicle, California Insurance Commissioner Harry Low is under fire as insurance companies and consumer groups debate a new proposal stating how personal financial information can be sold or traded.
Consumer advocate groups criticize Low for overlooking key opportunities to protect consumers through new financial privacy regulations, which are currently being written by the California Department of Insurance (CDI).
The new regulations will allow customer’s private financial information to be traded or sold by the insurance companies without prior permission.
Norma Garcia, senior attorney with Consumers Union, a nonprofit watchdog group, contends that California consumers have the right to choose what happens with their personal information.
The CDI contends its authority lies only in its ability to resolve differences between state and federal law. They are still waiting for lawmakers to resolve their differences with Gov. Gray Davis on privacy protections for consumers.
The debate continues over who controls personal information provided by customers when applying for a loan of insurance policy. The information is often traded between companies, and sometimes, telemarketing firms.
The proposed regulations by the CDI would allow companies to sell information to a sister company or affiliated marketing firm. They would be prohibited from selling the information to unaffiliated parties. Private medical information would be fully protected unless a customer gives permission to release it. Customers would be able to prohibit the sharing of the information only if they contact the company directly and fill out a form provided by the company.
The insurance industry is so far wary of the new proposals, concerned with confidentially duties that could lead to lawsuits if neglected, according to Bill Gausewitz, vice president of the American Insurance Association, who said the new regulations actually will cause more confusion.
Additionally, the insurance industry contends that two separate notices will be necessary to convey the necessary information regarding the new regulations due to a change in the required printing type size for privacy notices.
Topics California Legislation
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