House of Representatives

SB 1288

insurance information; privacy protection

Sponsors: Senators Cirillo, Nichols: Valadez

DPA	Committee on Financial Institutions and Insurance
DPA	Caucus and COW
X	As Transmitted to the Governor

SB 1288 does several things to conform to the standards of the Graham Leach Bliley Act (GLBA). Notice of policy renewal must be given at least once a year and notice of reinstatement is not required if notice was given in the previous year. Notice may be provided electronically. The Department is given any additional broad powers to enforce statutes relating to the GLBA.

History

Congress passed the Graham Leach Bliley Act in 1999. The Act permits banks and insurance companies to transact the others’ business. State financial institutions must preserve privacy standards. Arizona is one of fifteen states to have laws on consumer privacy and financial and medical information; this state has stricter privacy laws than GLBA’s standards. Statute currently prohibits insurance companies from sharing a consumer’s medical or financial information unless the consumer “opts-in,” and gives the institution permission to release the information to entities non-affiliated with the financial holding company. SB 1288 is an effort to conform Arizona law to GLBA standards.

Provisions

· Requires an insurance institution or agent to provide a notice of insurance information practices annually for policy renewals.

· States that a notice of policy reinstatement or change in insurance benefits is not required if notice was given within the preceding 12 months.

· Authorizes the notice of insurance information practices to be provided in electronic form if agreed upon by the applicant or policyholder.

· Authorizes the Department to enforce the GLBA’s standards related to privacy and the protection of nonpublic personal information.

· Prohibits an individual’s medical record from being disclosed for marketing purposes without written consent.

· Permits insurance institutions, agents or insurance support organizations to not give notice of information practices, provided that personal information is not disclosed under any of the following circumstances:

a) the policyholder has an invalid address.

b) The insurance institution or agent has not communicated with the policyholder for at least twelve consecutive months.

c) The insurance institution, agent or insurance support organization notifies the sponsor of an employee benefit plan, a group or blanket insurance policyholder or group annuity contract holder or worker’s compensation plan participant, and personal information is not disclosed.

· Permits insurance institutions, agents and insurance support organizations to share insurance information practices to its affiliates for the purpose of marketing a financial product or service.

· Makes technical changes.

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45th Legislature

First Regular Session 2 May 2, 2001

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