A consumer advocacy group in California is petitioning legislators to reconsider a bill that could potentially allow insurance companies to skirt around privacy laws.
The pending California Consumer Privacy Act, which takes effect January next year, lays down rules that prevent the personal information of consumers from being sold to other companies. The legislation also allows customers to sue negligent companies for data breaches.
However, a new bill introduced by California Assembly Insurance Committee chairman Tom Daly could render the Privacy Act null when it comes to the insurance industry, critics claim.
According to advocacy group Consumer Watchdog, Daly’s Assembly Bill 981 – meant to amend a portion of the Insurance Code – would do away with the privacy protections specific to the insurance and finance industries.
“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 spokesperson Adam Scow said in a statement.
The group sent a letter to Daly’s office on March 25, San Gabriel Valley Tribune reported. The letter said AB 981 was simply a “get out of jail free card” for the insurance and financial services industries.
Consumer Watchdog has additionally alleged that Daly had received $183,000 in campaign contributions from insurers such as Anthem, Allstate and Prudential. The group also claimed that members of the Assembly Insurance Committee have received over $1.1 million from insurers.
Daly’s office has yet to comment on the allegations, but has indicated that his bill would not do away with privacy, but instead reduce redundancies in overlapping privacy rules that will occur once the California Consumer Privacy Act is enforced.