By Kevin Smith, SAN GABRIEL VALLEY TRIBUNE

April 2, 2019

Watchdog group opposes bill that would exempt the insurance industry from a new privacy law

A watchdog group is urging California Assembly Insurance Committee Chairman Tom Daly, D-Anaheim, to withdraw legislation that would exempt insurance companies from complying with the California Consumer Privacy Act.

The Privacy Act, set to take effect in January, empowers consumers to prevent their personal information from being sold to other companies and also allows them to sue reckless companies for data breaches.

Santa Monica-based Consumer Watchdog said Daly’s Assembly Bill 981 would do an end run around those protections. And they claim the legislation is fueled by heavy campaign contributions.

Daly, they said, has received campaign contributions of $183,000 from insurance companies such as Anthem, Allstate and Prudential, while members of the Assembly Insurance Committee have received more than $1.1 million from the insurance industry.

“At a time when consumers want more control over their private information, Assembly member Daly is letting insurance companies and big banks off the hook,” Consumer Watchdog spokesman Adam Scow said.

Allowing the bill to go forward, Scow said, would enable a “wholesale invasion of the privacy of California policyholders.” The measure is scheduled to be heard in the Assembly Insurance Committee on Wednesday.

Representatives from Daly’s office would not speak on the record Tuesday. But his office indicated that his bill would not do away with privacy standards, but rather eliminate the overlapping of privacy rules that will occur when the California Consumer Privacy Act kicks in.

Various insurance industry protections have been in place for 40 years and are currently comprised of a combination of state insurance codes and additional regulations that have been adopted by the California insurance commissioner.

AB 981 is intended to eliminate the confusion of overlapping regulations and make the rules simpler and easier to understand.

Under existing law, an insurance institution or agent is required to provide notice of information practices to all applicants or policyholders. That includes:

• Types of personal information collected
• Sources and techniques used to collect information
• Parties to whom information may be disclosed
• The right to request correction, amendment or deletion of information

The California Consumer Privacy Act will give consumers the right to say no to the sale of their information. It will additionally give them the right to sue companies that collected their data where it was stolen or disclosed through a data breach if the company was careless or negligent about protecting the information.

In a March 25 letter sent to Daly’s office, the organization said measure, billed as the Insurance Information and Privacy Protection Act, is simply a get out of jail free card to the entire insurance and financial services industry.

If the bill succeeds, they said, the privacy protections that apply in other areas under the California Consumer Privacy Act won’t apply to insurance, credit cards, lending, investing, securities or any other financial transactions.

Kevin Smith handles business news and editing for the Southern California News Group, which includes 11 newspapers, websites and social media channels. He covers everything from employment, technology and housing to retail, corporate mergers and business-based apps. Kevin often writes stories that highlight the local impact of trends occurring nationwide. And the focus is always to shed light on why those issues matter to readers in Southern California.