Among the reasons she said she has introduced financial privacy legislation in the California Senate for the last four years is because she believes in stronger protections such as opt-in requirements rather than opt-out requirements. An opt-in provision requires a consumer to signify approval before personal financial information can be shared.

Ms. Speier also assailed the tiny print in privacy notices, joking that such tiny print had baby boomers outraged because it is a reminder that they are aging. But, she continued, when Citigroup has a real message, they put it on a billboard.

Financial services companies spend $24.4 billion nationally on direct mail every year, and of that amount, $6 billion on telemarketing alone, she said. That investment generates $270 billion in revenues, she continued.

A total of $20 million was spent to kill a financial services privacy measure in the California legislature, Ms. Speier added. The reason is that significant income is derived from the sale of lists. In the case of California's financial institutions, she estimated $463 million in sales.

But, Ms. Speier added, the public understands, and consequently, local jurisdictions are putting their own privacy requirements in place.

California will have another chance for privacy legislation during this legislative session with the introduction of S.B. 1. Previously, Sen. Speier introduced a similar bill, S.B. 773, that was opposed by financial services companies including life and property-casualty insurers.

During her remarks, Sen. Speier also said that in California there is a problem in the homeowners market citing a "use it and lose it" approach to providing insurance. Credit scoring was another problem area in insurance Ms. Speier noted, saying that it was a "caldron of potential discrimination."

But Ms. Speier's remarks largely focused on privacy, an issue that came up several times during the meeting.

Late last month, California put new financial services consumer privacy standards in place. The new requirements were finalized on Nov. 22 and become effective on March 24, 2003.

John Mangan, a representative with the American Council of Life Insurers, Washington, said that the California guidelines address points such as readability standards and specific details regarding what must be in a privacy notice.

S.B. 1, according to Mangan, has many of the same points that troubled insurers when S.B. 773 was debated. Among those concerns is the lack of ability among affiliated companies to share information as well as a requirement for California specific privacy notices, he said.

Property-casualty trade group representatives said that they were not present during Ms. Speier's speech and, thus, could not comment.

In another privacy matter, the NAIC has adopted an amendment to the Privacy of Consumer Financial and Health Information Regulation.

Insurers, particularly property-casualty insurers, had opposed the measure. They had argued that in the workers' comp market, companies would have to give privacy notice to employers and that employees could request it as well.

Moreover, they said that the new language included substantive changes and not simply amendments, and that the cost of retooling for the new notices will be costly.

Regulators countered these arguments, saying that it was a needed clarification of the initial model.