Opposition to Assembly Bill 21

{The California Assembly Banking and Finance Committee held a hearing regarding Assembly Bill 21 on Monday, April 16, 2001. Assembly Bill 21 is a privacy bill, which would establish a general “opt-out” rule for disclosing consumer financial information. The National Association of Independent Insurers (NAII) is opposed to the bill because of its threat to undermine California’s current insurance privacy law, which has provided sound consumer protection for two decades.

Assembly Bill 21 also potentially conflicts with the insurance commissioner’s authority to regulate insurers’ information practices. The bill’s opt-out procedure, which would apply to the sharing of information with affiliates, is also preempted by the federal Fair Credit Reporting Act prohibiting restriction of exchanging information among affiliates until 2004. In addition to the NAII, the California Department of Insurance and banks provided testimony opposing the bill. The Assembly Banking and Finance committee voted 7-2 to hold the bill, which means the bill may be up for considered again on April 30 when another privacy bill, Assembly Bill 203, is also scheduled to be heard. Body copy}