Agents Must Comply With the GLBA Despite Failure of California Bill.

News/Business Editors

WASHINGTON--(BUSINESS WIRE)--May 23, 2001

Agents and Brokers were notified recently that they are required to comply with consumer privacy portions of the Gramm-Leach-Bliley Act (GLBA) despite the failure of a bill in the California legislature.

Congress enacted the GLBA in 1999, modernizing the regulation of financial services by removing barriers between insurers, banks and security houses. The GLBA imposes new privacy requirements on businesses, including insurance agents and brokers. These federal regulations require compliance by July 1, 2001.

A related bill in the California Legislature (AB 1727), which would have implemented portions of the GLBA, recently stalled in the Legislature and won't be considered until next year. Agents and brokers were cautioned this week however that the bill's status does not release GLBA compliance requirements.

"The failure of the bill in no way impacts the obligation of insurance agents and brokers to comply with all the privacy provisions of the GLBA by July 1, 2001," said IBA West General Counsel Steve Young.

Young explained that among other things, the regulations require virtually all independent agents and brokers -- by July 1 -- to notify their customers of the firm's privacy policies, and give them the right to withhold permission to convey "non-public personal information" to unaffiliated companies.

With limited exceptions, the regulations require insurance producers: 1) to develop privacy policies and practices; 2) to notify all customers of those policies and practices; 3) to notify customers of the circumstances under which the agency or brokerage might disclose "non-public personal information" about the customer to third-parties (such as insurance companies); and 4) to provide customers the opportunity to "opt out" of such disclosures.

Because the regulatory requirements are lengthy and complex, IBA West and the PIA Group have joined forces with Hawaii Independent Insurance Agents, Nevada Independent Insurance Agents, and Insurance Skills Center to jointly sponsor workshops (with 2 CE credits) in California, Hawaii, Nevada and Washington. These workshops will help producers understand the ramifications of, and comply with, the GLBA and related federal laws.

"The workshops are being designed to walk producers through the most important provisions, permit them to ask (and get answers to) questions, show them exactly which sample forms to use and how to modify them for their own purposes, and also instruct them on how to get exactly what they need from the member web sites," Young said. "The workshops will cover not only the federal regulations, but also state regulations that impose slightly different requirements in each state."

More information on the courses is available by visiting www.ibawest.com, www.piagroup.org, www.niia.org or www.insuranceskillscenter.com. Locations and registration information can also be found by clicking on the links below.

REGISTRATION BROCHURE http://member.ibawest.com/pdf/Articles/GLBA.pdf

SEMINAR LOCATIONS http://member.ibawest.com/pdf/Articles/GLBALocations.PDF

IBA West is the nation's largest regional trade association representing insurance brokers and independent insurance agents in the West.