The Privateness Protections (H) Working Group of the Nationwide Affiliation of Insurance coverage Commissioners (“NAIC”) met on Wednesday June 12, 2024, to think about which proposed path ahead to pursue because it considers a brand new NAIC privateness mannequin presumably for all licensed insurance coverage entities and insurance coverage traces of enterprise. Readers will recall that final month, the working group posed to the general public a two-part query ought to the working group: (i) proceed its work on a mixed unitary draft Mannequin 674[1] which might substitute Fashions 670[2] and 672[3] as a unitary mannequin relevant to all licensees and features of enterprise? or (ii) revise one or each of the preexisting Fashions 670 and 672? In a twist, a consortium of commerce associations supplied a revised model of Mannequin 672, which they known as 672+, as an possibility for public remark. In a detailed vote, the working group determined to revise Mannequin 672, successfully abandoning final 12 months’s work on draft Mannequin 674, whereas additionally not embracing the trades’ proposed Mannequin 672+.
Background
In January 2023, the working group uncovered its first draft of the unitary Mannequin 674 which it was contemplated would substitute Fashions 670 and 672. The draft was instantly controversial. The working group hosted quite a few public remark durations, together with public drafting classes, over various months. On the August 2023 Summer time Nationwide Assembly the working group put its work on draft Mannequin 674 on maintain because it grew to become clear there was inadequate assist to maneuver ahead with that draft. Following the March 2024 Spring Nationwide Assembly, the working group sought enter from the general public on its proposed new path ahead. Ought to it return to the draft Mannequin 674, revise each of the preexisting privateness fashions (Mannequin 670 & Mannequin 672), or deal with revising one of many preexisting fashions? A coalition of commerce associations[4], supplied their very own proposed draft revising the preexisting Mannequin 672. The general public remark interval closed on Could 30.
The Outcomes
Throughout this week’s public assembly the feedback obtained divided clearly. The buyer representatives most well-liked to reopen the draft Mannequin 674, emphasizing their desire for opt-in fairly than opt-out because the default. In distinction, {industry} consultant most well-liked their proposed 672+. On the conclusion of the general public feedback, the Vice Chair expressed her opinion that Mannequin 672 could also be extra implementable, whereas the Chair noticed that revisions to Mannequin 672 appeared to have the assist of a majority of the working group members. Within the curiosity of transparency, the Chair requested for a proper roll name vote. A majority of the working group members selected to desert the draft Mannequin 674 and deal with revising the preexisting Mannequin 672. It was a detailed vote: 9 yea, 6 nay, 2 abstentions. Moreover, various regulators in attendance didn’t vote when their state was known as upon – selecting not even to reply “abstain,” however fairly to lodge no vote by any means, solely silence.
The New Path Ahead
The bulk in assist of shifting ahead with revising Mannequin 672 isn’t a unified bloc. Three of the “yay” votes added a caveat to their assist, initially raised by Bob Wake of Maine, that it’s not the place they begin, however the ultimate end result that issues – these states expressed a necessity to start the substantive work of drafting a brand new mannequin. With out the three caveat states (Maine, Maryland, Wisconsin) placing apart their reservations to vote “yay,” the vote would have failed. It’s clear {that a} plurality of states oppose reopening draft Mannequin 674. Equally, a plurality of states want to revise Mannequin 672. Nonetheless, an analogous variety of states select to abstain or not vote in any respect. On this setting and and not using a clear mandate, the working group will transfer ahead with revisions to Mannequin 672. The extent to which contributions from the industry-proposed 672+ will probably be integrated is unsure.
Locke Lord will proceed to observe developments on the working group. If in case you have any questions, please attain out to the writer or your Locke Lord companion.
See additionally earlier Locke Lord commentary on the working group’s prior efforts: NAIC Privacy Protections Working Group’s Path Forward, NAIC’s Work on Privacy Model Grinds On, and NAIC Picking Up Steam as it Drafts New Privacy Model.
[1] Insurance Consumer Privacy Protection Model Act (#674) – proposed draft July 2023.
[2] Insurance Information and Privacy Protection Model Act (#670).
[3] Privacy of Consumer Financial and Health Information Regulation (#672).
[4] American Council of Life Insurers, America’s Well being Insurance coverage Plans, American Property Casualty Insurance coverage Affiliation, Nationwide Affiliation of Mutual Insurance coverage Firms, and the Affiliation for Unbiased Brokers.
