AIA: Info Sharing Bill Still Flawed

NU Online News Service, Aug. 23, 9:58 a.m. EST?An insurer group is predicting their industry will suffer if aneffort to overhaul financial services industry operations byCalifornia State Sen. Jackie Speier, D-San Francisco, succeeds.

"Nothing has changed in the last year. This bill remainsfundamentally flawed and will cause unforeseen consequences," saidBill Gausewitz, American Insurance Association assistant vicepresident, Western region. "This bill discriminates againstcompanies based on their corporate structure, and its technicalproblems will disrupt the internal operations of manyorganizations."

The measure, SB 773, will create an opt-out system forinformation sharing between affiliated entities and an opt-insystem for information sharing between non-affiliated thirdparties.

"Research by professors at Columbia University estimates theopt-in regime created in this bill will cost businesses andconsumers billions of dollars," Mr. Gausewitz said.

He said that SB 773 will separate California "from the nationalframework and force banks and insurers to retool operations tocomply with a special set of California rules."

The bill will threaten California's "already struggling economy,reduce jobs, and cause more confusion among consumers," Mr.Gausewitz concluded.

The Assembly Banking Committee has approved SB 773 by an 8-4vote. The bill will now be heard by the Assembly JudiciaryCommittee before heading to a full vote on the Assembly Floor.