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The NAIC is creating a brand new Shopper Privateness Protections Mannequin Act (# 674) which can exchange the preexisting Insurance Information & Privacy Protection Model Act (# 670) and Privacy of Consumer Financial & Health Information Regulation (# 672). The Working Group uncovered its first draft on January 31 for a 60-day public remark interval which closes April 3. Yesterday on the NAIC Spring Nationwide Assembly, the Working Group adopted a piece plan which lays out an in depth schedule throughout the spring and summer time for regulatory solely conferences, consultations with trade, and open classes, together with public remark intervals and remaining approval on the Fall Nationwide Assembly in December.
The Working Group heard feedback from a number of commerce associations which uniformly criticized the present draft as unworkable, failing to achieve the precise stability between insurance coverage licensees’ want to gather and retain information and shopper’s preferences to limit insurer’s use of their information. Of explicit word, is the intentional exclusion by the Working Group of a joint advertising and marketing exemption, some extent explicitly reaffirmed by regulators when raised by trade representatives.
The contours of an exemption or secure harbor for insurance coverage licensees who both adjust to or are topic to HIPAA seems doubtless, although the precise type of such an exemption or secure harbor is to be decided.
Whereas the Working Group Chair, Virginia Commissioner Katie Johnson, emphasised that the uncovered model is barely a primary draft, at this stage, we will report some foundational selections by the Working Group crucial to the doubtless form of the ultimate mannequin act. First, the mannequin won’t straight regulate third-party service suppliers, however will rely on state insurance coverage regulators’ authority to manage licensees’ contracts with third-party service suppliers. Second, in recognition of insurance coverage licensees’ heightened have to retain shopper info the Working Group is rejecting a “proper to be forgotten” selecting as a substitute info retention requirements. Equally, the Working Group rejected prior consent necessities for gathering shopper information however would impose restrictions on promoting or transferring shopper information and correcting inaccurate information alongside mandates to de-identify and mixture information that’s deemed now not essential to retain. Lastly, the Working Group selected to incorporate antagonistic underwriting selections inside the draft mannequin.
Locke Lord will proceed to watch for any developments. If in case you have questions, please contact your Locke Lord relationship accomplice or the writer.
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