According to the American Insurance Association (AIA), despite continued opposition from the financial services industry, the California Assembly Banking Committee approved the state’s most controversial financial privacy measure of the 2001 session.
Bill Gausewitz, AIA assistant vice president, western region said despite the author’s attempts to amend SB 773, the bill remains bad public policy. He added that under SB 773, companies will be discriminated against based on their corporate structure, and businesses competing in the same financial services marketplace will be forced to operate under differing sets of rules.
The bill, SB 773 by Jackie Speier (D-Hillsborough), will create an opt-out system for information sharing among affiliated companies and an opt-in system between non-affiliated third parties. The bill will also give customers a right to sue their financial institutions if information is accidentally disclosed.
Gausewitz stated that businesses organized by contract will now be treated as non-affiliated businesses, unable to share information unless all their customers return opt-in notices. He further indicated that larger businesses organized by departments will be allowed to share information freely between departments. If SB 773l becomes law, Gausewitz noted that California will be the only state in the country to operate under an opt-in system.
SB 773 received three hearings in the Assembly Banking Committee before the Committee voted 8 to 2 to approve the measure. The bill will now move forward to be heard in the Assembly Judiciary Committee.
Topics California Legislation
Was this article valuable?
Here are more articles you may enjoy.
California Commissioner Moves to Implement Insurance Rate Review Reforms 
Florida Insurer Can’t Object to Appraiser After the Award Is Decided, 11th Circuit Says 
Manufacturers Hit by Soaring Property Insurance Costs 
Consumers’ Refusal to Keep Paying Higher Prices May Halt Inflation Spike 
