Even though the Legislature adjourned weeks ago without passing onerous privacy legislation, the Alliance of American Insurers continues working to address other ill-advised privacy measures in California. The most recent threat comes from local ordinances and newly adopted regulations from the Department of Insurance.
“I am reminded of the tag-line from the movie ‘Jaws.’ Just when you thought it was safe, more bad things are happening,” said Rey Becker, vice president of property/casualty for the Alliance.
The Alliance has joined with other insurance trade associations in an amicus brief supporting a pending federal court challenge to onerous copycat local ordinances adopted in the San Francisco Bay area (Daley City and San Mateo County). “We are confident that the judge will strike-down this crazy quilt approach to regulating financial services,” said Becker.
He also expressed frustration and disappointment with privacy regulations adopted this week by the Department of Insurance. “The department has adopted regulations that conflict with both the Gramm-Leach-Bliley (GLB) Act and existing California law,” Becker said. “The regulations also create costly ‘California-only’ mandates and restrictions that will ultimately translate into fewer choices and higher premiums for the insurance consumers of California.”
The regulations include:
California-only privacy notice language and type-size requirements;
Requiring self-addressed, postage prepaid return envelopes;
Becoming the only state to regulate non-workers compensation commercial insurance privacy practices, in conflict with both federal and California law; and
Allowing customers to refuse to cooperate in executing “opt-ins,” with no consequences.
“The Alliance is reviewing its options regarding further administrative and legal stages of the process,” Becker noted.