US life insurance trade group advocates for federal privacy framework

The American Council of Life Insurers supports a federal privacy framework, according to a March 17 statement for the record it submitted to the House Financial Services Committee.

In the letter, the ACLI said Congress should update and modernize the Gramm-Leach-Bliley Act of 1999 (GLBA), which established rules governing how financial institutions handle customer privacy and data security.

The ACLI argued that there is a "critical" need to modernize the GLBA to ensure consumer protections, particularly when it comes to the collection, use and disclosure of consumers' personal information.

"A modernized data privacy framework should address the consumer's ability to access affordable and readily available life insurance services and products," said ACLI President and CEO David Chavern in the statement. "As a longstanding conscientious and responsible guardian of customers' confidential health and financial information, life insurers obtain sensitive customer data in order to provide effective and affordable products to consumers, and ACLI has long advocated for common-sense, consumer-oriented policy proposals."

Chavern also warned that the lack of a uniform federal standard will create confusion for consumers trying to understand how their data is being secured.

"Absent federal modernization, conflicting and inconsistent state privacy laws will continue to confuse customer understanding of their own data protections and interfere with the ability of consumers to access financial services products and account services," Chavern said. "ACLI members support federal legislation that provides preemptive, uniform national standards, in principle and application, for all consumers to govern their interactions with all business sectors."

During a March 17 hearing in the House Financial Services Committee titled "Updating America's Financial Privacy Network for the 21st Century," committee Chairman Rep. French Hill (R-AR) said Congress is considering changes to the GLBA and is working on it with colleagues in the Energy and Commerce Committee.

"As we consider additions to the GLBA, we must strike a balance to achieve consumers' desire for greater control over their financial data on one hand, and on the other hand, their desire for financial services to work as seamlessly as possible and without having to wade through a sea of check boxes and emails," Hill said.

Hill noted that access and deletion rights are among the additions that Congress is considering, and he emphasized the importance of updating these standards under a federal umbrella.

"We must also recognize that the states have been running 26 years of experiments; with the results from these laboratories of democracy in hand, it's clear the time is now for a federal standard," Hill said. "Nationwide uniformity will promote competition by lowering barriers to entry created by the current state patchwork, which disincentivizes firms from entering new state markets and competing on price for the ultimate benefit of our consumers."