The Automotive Service Association (ASA) has announced that the Housing and Insurance Subcommittee of the U.S. House Financial Services Committee held a hearing to discuss proposals to reform domestic insurance policy. Included in the hearing agenda was the Insurance Data Protection Act, Rep. Steve Stiver’s (R-Ohio) bill to modify the authority of the Federal Insurance Office and the Office of Financial Research to subpoena data from insurance companies.
Under this legislation, federal entities and state regulators must maintain the confidentiality of nonpublic data obtained from or shared with other federal and state regulators. Both Tom Karol of the National Association of Mutual Insurance Companies and Joseph C. Kohmann of the Property Casualty Insurers Association of America testified in support of the Insurance Data Protection Act.
“The bill will ensure that confidentiality applicable to information relating to insurance companies is not lost when that information is shared among various federal and state regulators,” said Kohman. “The Dodd-Frank Act now provides that privileged information retains its privilege when it is submitted to FIO, but it is less clear whether that privilege might be lost if FIO shares it with other federal or state agencies. For example, Dodd-Frank authorizes FIO to disclose information to state regulators. The regulators would be bound by an information sharing agreement with the government, but a judge might later subject the information from the state regulators to a subpoena, taking the position that the information-sharing agreement applies only to the state regulator or the NAIC and not to the courts. There is no evidence that Congress intended that privileged information should lose its privilege when it is shared with other state or federal regulators.”
ASA says it supported the establishment of the FIO and will continue to monitor any efforts to limit the FIO’s jurisdiction.