Mont. Legislature Approves HB 205

Both houses of the Montana Legislature have approved HB 205, the Insurance Department’s bill to amend the state’s Insurance Information and Privacy Protection Act, according to the Alliance of American Insurers. It is anticipated that Gov. Judy Martz (R) will approve the measure.

The Montana privacy law has followed a tortured and troubled path for the past few years, having been amended in 1999 and 2001. This bill was the Department’s attempt to improve the Act, as well as adapting it to the new U.S. Department of Health and Human Services (HHS) health information privacy regulations under the Health Insurance Portability and Accountability Act (HIPAA).

This bill will improve the law but, even so, the Act will still deviate significantly from the 1982 NAIC model law, the 2000 NAIC model regulation, and Title V of the Gramm-Leach-Bliley (GLB) Act.

The bill contains the following provisions:
– Amends the definition of “insurance function” to include fraud prevention and technical, administrative or professional services.
– Amends the existing exemption section concerning federal medical privacy rules to address the new HIPAA regulations.
– Amends the existing requirements for insurers using two privacy notice forms. National notice forms containing a generic recognition that some state privacy laws are more protective than federal law will suffice, rather than requiring a Montana-specific reference.
– Clarifies the handling of individual requests for records of disclosure of medical records.
– Adds additional exceptions for disclosures of non-medical information to lienholders, mortgages, assignees, lessors, others with legal interests in an insurance policy, insurance rate advisory organizations, guaranty funds, agencies rating licensees, persons assessing licensee compliance with industry standards, as well as attorneys, accountants, and auditors performing services for the licensee.