States Debate Privacy Rules

While the Department of Health and Human Services has postponed the effective date of privacy regulations issued by President Clinton, states are taking action to comply with the privacy provisions of the Gramm-Leach-Bliley Act of 1999. As they draft privacy legislation, most states are using one of two model acts, the Model Financial Information Privacy Protection Act, developed by the National Conference of Insurance Legislators, or the Model Privacy of Consumer Financial and Health Information Regulation, developed by the National Association of Insurance Commissioners. Each outlines standards for insurers to follow when sharing or disclosing consumer and customer information. The NCOIL Privacy Model generally parallels the model privacy regulation recently adopted by the NAIC, with a few important exceptions, according to the American Insurance Association.