Insurers Happy with Utah Privacy Bills

March 13, 2006

In its just-concluded session, the Utah Legislature passed legislation to protect consumers from unauthorized access to their credit-related information, while preserving insurers’ access to credit data, Property Casualty Insurers Association of America (PCI) Regional Manager Kenton Brine said.

“Utah legislators — and especially Sen. Carlene Walker — showed great leadership in approving measures that provide strong protection for consumers from illegal access to their personal information without needlessly interfering in relationships between consumers and the businesses that serve them,” Brine said.

Senate Bill 69, if signed into law, will require that consumers be notified when their personal information held by data companies, financial institutions, retailers or others is exposed to unauthorized access, stolen or lost. But early versions of the bill did not prevent the filing of frivolous class action lawsuits in connection with alleged breaches or notification procedures. PCI worked with lawmakers to add amendments prohibiting creation of a private right of action under the bill, the association said.

With SB 71, PCI also wanted to ensure access to consumer credit information for insurance companies when a credit freeze is in effect on a consumer’s file. “In the age of 24-hour access for consumers to insurance products — online, over the phone and with insurance agents — a credit freeze would add unnecessary frustration and confusion for consumers seeking instant insurance quotes, Brine said.

“Insurance companies that access credit reports do not use the information for lending purposes, or share the information with non-affiliated companies,” he continued. “And criminals who steal credit information don’t use the data to get a better rate on their insurance. It made sense for PCI to work with legislators to make sure consumers can protect their personal information without impeding their ability to get the best possible rate for home or auto insurance.”

HB 72 legislation will allow private workers compensation insurance carriers to compete with the Utah State Workers Compensation Fund for the right to provide workers compensation coverage to state agencies, beginning July 1, 2007, PCI said.

“PCI members hope this bill is only the first step in efforts to ensure a fair, open market for workers compensation coverage in the wake of the Utah Supreme Court ruling last summer that the state fund is a mutual insurance company not owned by the state of Utah,” Brine said.

Gov. Jon Huntsman, Jr. has until March 21 to act on bills approved by the Legislature. Unless otherwise specified, enacted legislation becomes effective May 1. But SB 69 becomes effective Jan. 1, 2007 and SB 71 takes effect Sept. 1, 2008. House Bill 72 becomes effective July 1, 2007.

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