Contact: William Bradford
Tel: 847.297.7800

FOR RELEASE ON RECEIPT

4/5/2000



Consumers' Privacy Should Be Balanced With Need to Be Informed About Products

DES PLAINES, Ill — Federal privacy regulations should balance protection of consumer privacy with the need to inform the public of the availability of products, a leading insurance trade group says.

"The National Association of Independent Insurers (NAII) urges federal regulators to streamline the privacy rules," said Michael Koziol, NAII insurance services counsel. "They should strive to achieve uniformity among federal regulators while striking a balance between the need to protect consumer privacy and the valid use of information, including the need to inform the public of the availability of products. An 'opt-out' provision is desirable over an 'opt-in' approach because opt-out enables an individual to say 'I don't want my information used,' while preserving the cost-effectiveness of gathering and retaining data."

"Regarding nonpublic personal information, NAII believes the stand of 'available from' public sources is more workable in that it states that information that is publicly available simply is public. The 'obtained from' standard is unworkable because it would require entities to set up a costly tracking system for information that is received via an application and thereby is considered personal, for example, regardless of the information's availability in a phone book.

"NAII strongly urges federal regulators to permit third party contractors to use information received from financial institutions to improve credit scoring models or analyze marketing trends so long as the information is maintained in a manner that does not allow identification of a particular consumer. Information that does not identify individuals does not jeopardize their privacy and should be generally available for research.

"Since many states will have to enact enabling legislation before insurance privacy regulations can be drafted, NAII urges federal regulators to extend the time period so that much of the Gramm-Leach-Bliley Act privacy procedures can be phased in."

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 total property/casualty insurance in the country.