Contact: Nina Lill
Tel: 847.297.7800

FOR RELEASE ON RECEIPT

3/30/2000



California Privacy Bill Premature

SACRAMENTO, Calif. — California legislators should hold off on state privacy legislation until federal regulators have developed guidelines on consumer information disclosure.

National Association of Independent Insurers (NAII) Vice President Sam Sorich submitted testimony to the Assembly Judiciary Committee Tuesday opposing Assembly Bill 1707.

"NAII believes California and all the states should wait until federal guidelines, due May 13, 2000, are in place rather than charging ahead with inconsistent legislation that will be costly to fix later," Sorich said.

"AB 1707 would overturn proven privacy protections already in the law as well as conflict with existing federal law on the sharing of information among affiliates of a financial institution, which includes insurers."

The National Association of Insurance Commissioners (NAIC) is presently drafting regulations, based on its model privacy act, to submit to federal regulators who will implement Title V of the Gramm-Leach-Bliley Act. NAII believes states should closely follow the NAIC's lead to create consistent regulation from state to state.

"Clear, consistent and uniform financial privacy standards are in the best interest of consumers and financial institutions," said Sorich. "The protections granted to consumers should not vary based on where they live or what type of financial institution they are doing business with."

California's Insurance Information and Privacy Protection Act already has many of the consumer protections outlined in AB 1707. Insurers must now seek written consumer consent on disclosure of most personal information as well as clearly outline their information practices. NAII believes the present law's proven track record should exempt insurance transactions from AB 1707.

NAII, based in suburban Chicago, is the nation's largest full-service property-casualty insurance association, with more than 650 member companies that write more than 33 percent of the total property/casualty insurance in the country.