Copyright 2000 The New York Times Company
The New
York Times
View Related Topics
October 19, 2000, Thursday, Late Edition -
Final
SECTION: Section B; Page 12; Column
5; Metropolitan Desk
LENGTH: 598 words
HEADLINE: State to Adopt Privacy Rules On Information
From Insurers
BYLINE: By JOSEPH P. FRIED
BODY:
New York State plans to adopt, within a
month, new insurance regulations that will restrict the health and financial
information that insurers may share with banks and securities houses about their
customers.
The proposed regulations are to be put into effect by the
state's Insurance Department to comply with a requirement of federal legislation
enacted last year. The law makes it easier for banks, insurance companies and
financial brokerage firms to enter one another's businesses or to affiliate, and
it requires states to take measures to regulate insurers' sharing of
information. The new federal law has intensified privacy concerns because, for
example, it could allow a health or life insurance company affiliated with a
bank to give the bank medical information about a policyholder, or someone
rejected for a policy, that the bank might use to deny a mortgage, business loan
or credit card.
Though not new, fears about such use of insurance
company information have increased because mergers or other affiliations
involving financial and insurance companies are expected to be more frequent.
The new regulations are meant to govern the exchange of information.
The
regulations planned in New York would prevent insurance companies from sharing
medical records with affiliates or third parties unless the customer consents in
writing, said Kevin Rampe, the general counsel for the Insurance Department.
The so-called opt-in agreements would be in effect for 24 months; after
that, a new agreement would have to be signed to continue the information
sharing.
A different rule would apply to personal financial information
held by the insurer. A customer may withhold consent on sharing such information
with a third party, but not with an affiliate, Mr. Rampe said. "Federal law says
you can't restrict financial information sharing among affiliates."
The
planned regulations would permit insurance companies to share health or
financial information with law enforcement agencies investigating fraud or other
possible crimes, regardless of the customer's preferences, Mr. Rampe said.
New York is one of about 35 states that have no personal
information privacy protections in their insurance regulations, Mr.
Rampe said, though health laws restrict insurance companies' release of
information about people with H.I.V. or AIDS and other laws bar insurance
records from being used to locate victims of domestic violence.
Thomas
Workman, president of the Life Insurance Council of New York, which represents
nearly 70 insurance companies, said his group supported the planned regulations,
which, after being adopted in the next few weeks, are to go into effect in July.
The reaction from consumer advocates was mixed.
"It's
encouraging that they're giving consumers control over their personal health
information, and I hope there are no exceptions that dilute that control," said
Russ Haven, legislative counsel with the New York Public Interest Research
Group.
But Susan M. Dooha, the health policy director for the Gay Men's
Health Crisis, said that in the drafts she had seen, "it wasn't clear what the
opting-in and opting-out provisions meant" or how customers would know when or
why information about them was being shared.
New Jersey and Connecticut
are among the 15 or so states that already have privacy regulations as part of
their insurance laws. Connecticut is planning to issue revised rules and the New
Jersey Legislature is considering several bills in light of the federal
legislation, aides to the states' insurance regulators said.
http://www.nytimes.com
LOAD-DATE: October 19,
2000 
