AIA Denounces Calif. Privacy Bill
NU Online News Service, March 5, 12:55 p.m. EST?Some California lawmakers think a certain privacy bill would protect consumers from intrusive information-sharing among financial instutions. A prominent insurer trade group, however, believes the bill would in fact limit consumer choice and increase prices.
The California Senate has approved a measure that would create an "opt-in" system for the sharing of consumer information among non-affiliated financial institutions (including insurers). The bill, S.B. 1, provides consumers an "opt-out" system for information sharing among affiliated financial institutions.
Under an "opt-in" system, information can be shared only if the consumer specifically consents. "Opt-out" means the information can be shared unless the consumer specifies otherwise.
The Washington, D.C.-based American Insurance Association wasted no time in voicing its objections to the measure.
"Once again the California Senate has approved an unworkable bill that raises the cost of providing financial products in this state and does nothing to provide additional benefits to consumers," said Bill Gausewitz, AIA' s assistant vice president for the Western region.
Mr. Gausewitz noted that the provisions in the bill would result in consumers missing out on new conveniences and services, or paying a higher price for them due to lack of knowledge regarding what financial institutions are offering.
This marks the third year in a row that the state senate has approved the bill. The vote was 23 to 6. The bill now heads to the California Assembly.
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