Alliance Blasts Web Privacy Bill

NU Online News Service, May 15, 4:00 p.m.EST--The Alliance of American Insurers today expressedopposition to the online privacy bill scheduled for markup tomorrowin the U.S. Senate Commerce, Science and TransportationCommittee.

Sponsored by Senate Commerce Committee Chairman Ernest F.Hollings, D-S.C., the Online Personal Privacy Act, S. 2201,preempts state privacy statutes, requiring online businesses toadhere to stricter privacy regulations than traditionalbusinesses.

"Senator Hollings is reinventing the wheel. His bill wouldoverturn the privacy constraints in Gramm-Leach-Bliley and theHealth Insurance Portability and Accountability Act before we havesufficient information on how well these provisions havefunctioned," said Kenneth Schloman, Washington counsel for theAlliance, based in Downers Grove, Ill.

"As drafted, this bill would prevent the flow of informationneeded for our economy to function efficiently," he said. "Forexample, under this bill's provisions, an individual could prohibitan auto insurer from obtaining his driving record from the statedepartment of motor vehicles via the Internet. That would voidnormal business activity now permitted under the Driver's PrivacyProtection Act."

He added that under the proposed bill, a workers' compensationinsurer could not get information indicating a pre-existingcondition that would affect treatment and return to work.

"Online insurance companies and other businesses would be heldto a stricter standard than traditional businesses--both in theinformation collected and the way in which it could be used," hesaid. "These multiple standards would lead to a regulatorynightmare."

Earlier this month in the U.S. House of Representatives,Commerce, Trade and Consumer Protection Subcommittee Chairman CliffStearns, R-Fla., introduced "similar but less sweepinglegislation," the Alliance noted. The Consumer Privacy ProtectionAct, HR 4678, offers privacy protections only in areas not alreadyaddressed by either the Gramm-Leach-Bliley Act or the HealthInsurance Portability and Accountability Act, the Allianceadded.

"In stark contrast, the House bill covers only the areas inwhich Congress has not yet acted. This is a more useful andappropriate approach," concluded Mr. Schloman.

(For full coverage of tomorrow's Senate Committee markup, checkwith the "NU Online News Service" at NationalUnderwriter.com.)