Contact: Nina Lill
Tel: 847.297.7800

FOR RELEASE ON RECEIPT

11/3/2000



Kentucky Privacy Rule Should Follow Gramm-Leach-Bliley

FRANKFORT, Ky. — Kentucky regulators should set aside the flawed privacy model adopted by the National Association of Insurance Commissioners (NAIC) and consider a regulation that more closely follows the Gramm-Leach-Bliley (GLB) Act.

The National Association of Independent Insurers (NAII) urged the Kentucky Insurance Department not to adopt the NAIC Insurance Information and Privacy Protection Act in comments submitted Wednesday. NAII has opposed the NAIC model because it greatly exceeds the requirements of GLB. The Kentucky Insurance Department is currently accepting comment on the privacy issue and is expected to propose a regulation soon.

The NAIC model law includes a provision on health information privacy that is not required by GLB and therefore does not require any action on the states' part.

Adoption of the NAIC model law is also problematic because its health privacy provisions may be inconsistent with health privacy regulations to be released in November by the U.S. Department of Health and Human Services. If the HHS rules are different than the NAIC model law, it would create dual compliance standards for property/casualty insurers and confusion and frustration for the consumer.

"We urge Kentucky regulators to examine the model law developed by the National Conference of Insurance Legislators (NCOIL)," said Robert J. Hurns, NAII counsel. "The proposed NCOIL model more closely tracks GLB and is preferable to the NAIC model."

NAII, based in suburban Chicago, is the nation's leading full-service property-casualty trade association, representing more than 675 member companies. NAII members write more than 33 percent of the nation's property-casualty insurance and more than 43 percent in Kentucky.