By John Hilton
InsuranceNewsNet October 29, 2019
BOSTON
-- How insurers treat sensitive consumer data is a tricky issue for regulators
and lawmakers.
Iowa
Insurance Commissioner Doug Ommen conceded "there is a lot of concern
among some regulators that the data that is finding its way" into the
wrong hands.
Ommen
was part of a discussion on the future of financial services regulation at the
LIMRA 2019 Annual Conference.
Still,
despite the potential for devastating data breaches, Ommen is cautious about
using the hammer of regulation.
"I
don't know if I think additional regulation is the right answer," he said.
"I know across the pond, Europe is looking at that type of approach and
California is looking at that type of approach as well. I don't know if that
approach works very well."
Two of
the most prominent data privacy laws currently influencing the discussions are
the European Union General Data Protection Regulation and the California
Consumer Privacy Act.
The
California law takes effect in the summer 2020 and analysts say insurers, even
those with cyber insurance, might not be adequately protected. Speculation is
rampant on how the California law will influence what the NAIC produces.
Trust
is the key to good business relationship between carriers and consumers, said
Ommen, who sits on a big data working group at the National Association of
Insurance Commissioners. More regulations can just get in the way of developing
that trust, he added.
"I
don't know if regulation is the answer because as regulators, we may have our
opinion of what is good and bad," Ommen said. "But it gets back to
the very basics of the relationship between the consumer and the carrier that's
providing that peace of mind."
The
difficulty regulators have now is not just the initial consent, but
"whether or not consumers understand what is being used, how it's being
used and whether it's even accurate," Ommen said.
So much
more data can be collected on consumers now, he said, which makes it even more
difficult. And many carriers use third-party providers to collect data.
At the
end of the day, it comes down to doing the right thing. To some extent, Ommen
said insurers will determine how far regulators go.
"Companies
have to own the responsibility of what data they're going to use," he
explained. "Regulators will work with the carriers to rise to a level of
comfort from the carrier side. If companies do this right, there won't be a
need for regulation. You, the carriers, can either do it right, or you can do
it wrong."
InsuranceNewsNet
Senior Editor John Hilton has covered business and other beats in more than 20
years of daily journalism. John may be reached at john.hilton@innfeedback.com.
Follow him on Twitter @INNJohnH.
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