Alliance Says New Mexico Privacy Rules Violate State Law

The Alliance of American Insurers has questioned the legality of recently adopted privacy regulations in New Mexico.

“Earlier this year, the New Mexico Legislature directed the superintendent of insurance to adopt rules governing the privacy of ‘nonpublic personal information of insured persons.’ Thus, New Mexico law authorizes rules governing only applicants for policies and actual policyholders, in other words, the folks that have a business relationship with the insurer and pay the premiums,” said Rey Becker, president of property/casualty for the Alliance of American Insurers.

“Unfortunately, the superintendent ignored the clear wording of the law and unilaterally broadened the rules to cover third-party liability claimants and workers compensation claimants, who are clearly not insured persons. In the case of workers compensation claimants, this also violates the clear scope of the federal Gramm-Leach-Bliley (GLB) Act, which applies only to goods or services for ‘personal, family or household purposes,’ not workers compensation insurance policies,” Becker added. “Most troublesome of all is the creation of a new ‘opt-in’ system, which will create additional costly barriers for insurers wishing to write business in New Mexico, and place them at a disadvantage compared to banks and securities firms, which remain subject to the more cost-effective ‘opt-out’ approach,” Becker said. “So far, only New Mexico and Vermont have made the decision to force their insurance consumers to live in a financial services backwater, compared to the rest of the country.”

Topics Workers' Compensation Mexico New Mexico