read Read

e-mail E-mailprint Print

PRIVACY

FINANCIAL INFORMATION PRIVACY

THE ISSUE IS: Should privacy protection standards that exist for financial services institutions who divulge consumers' and customers' "nonpublic personal information" be uniform across the United States, and does the current standard adequately protect consumer privacy as well as the consumer's right to make individual decisions?

IT'S IMPORTANT BECAUSE: Financial information privacy remains a controversial and politically significant issue. The continued attention on privacy is leading to increasingly restrictive and inconsistent laws that will ultimately limit consumer choices and benefits.

Insurers and consumers have been through two privacy notice cycles as required by the Gramm Leach Bliley Act (GLBA), and the customer opt-out rate remains in single digits. Self-appointed consumer advocates claim that the "low" opt-out rate is proof that privacy notices are confusing, and that opt-out is an inadequate standard. While some believed that the privacy debate ended with the passage and implementation of the GLBA, it is now clear that the GLBA was only the starting line.

The issue of consumer privacy is highly complex and has been over-simplified by some who advocate standards that are more restrictive. The truth is that people make varying decisions about their privacy for a multiplicity of reasons. Consequently, addressing privacy concerns in a way that respects an individual's right to make choices does not lend itself to simple or repressive solutions. The opt-out standard strikes a balance by protecting nonpublic personal information without denying others the benefits of information sharing.

NAMIC POSITION: NAMIC supports the privacy provisions contained in the GLBA. It is essential for consumers to know for what purposes their information will be used. Combined with existing financial privacy law, the GLBA provisions provide consumers with strong and effective privacy protections. Privacy is an extremely complicated issue, and additional restrictions should not be adopted without an extensive analysis of their potential ramifications such as an inability to conduct legitimate business transactions and to detect and prevent fraud.

NAMIC believes that consumer choices must be respected. Consumers deserve to know that the "nonpublic personal information" they submit to a financial institution, including an insurance company, will not be used in an inappropriate manner. Accomplishing this in a way that respects a consumer's right to make an intelligent and free choice requires a delicate balance that cannot be attained by restrictive or simplistic laws.

Therefore, NAMIC will continue to advocate for the following:

  1. The primacy of the opt-out standard throughout all insurance jurisdictions. This standard respects consumer choice about the use of nonpublic personal information without imposing an overly restrictive regulatory scheme that makes such choice less likely.
  2. More readable privacy notices, if legally adequate language can be developed for GLBA required phrases like "nonpublic personal information."

powered by Google

Legislative Action Network

As a "minuteman," you will be in the know at the critical moment when a call to action is necessary or when decisions are being made on issues like federal regulation of insurance, legal reform, terrorism insurance, asbestos reform and small property/casualty company taxation.

Benjamin Franklin Public Policy Award

Every two years, NAMIC presents their coveted Benjamin Franklin Public Policy Award© to lawmakers who have supported a stronger insurance market at least 75 percent of the time. This is demonstrated based on their support of NAMIC's position on certain roll call votes taken, or being a principal player/sponsor on legislation affected the property/casualty insurance industry, during the previous Congress.