[Editor's Note: The Privacy Tools Kit discussed below is now available here. A PIA member password is required to access this material.]

By Timothy K. Kovac
Director of Business and Compliance Affairs
PIA National

The advancement of technology over the years has dramatically changed the way independent insurance agents do business. With the Internet, email, computer networks, and fax machines, companies are able to send and receive vital business information all over the world at the click of a button.

These improved methods of communication undoubtedly increased efficiency for businesses, but they came with a price. That price was compliance with a myriad of federal and state laws created to regulate the use and sharing of personal information that has become so easy to access. Laws such as the Gramm-Leach-Bliley Act (GLBA), the Fair Credit Reporting Act (FCRA), the Health Insurance Portability and Accountability Act (HIPAA), the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM), and the “do-not-call” and “do-not-fax” rules all create significant compliance hurdles for independent insurance agents and brokers.

Compliance with these laws is mandatory and failure to comply will not only lead to significant fines and penalties, it can lead to the breakdown of trust between an agent and his or her customers -- a trust which is vital to any thriving insurance practice. Due to this, insurance agents must carefully examine all aspects of their business practices and, where required, change them to ensure compliance with both federal and state privacy laws.

To assist PIA members in understanding the overwhelming burden of compliance, PIA National has updated and expanded its original privacy compliance tools kit. The tools kit provides a basic summary of the relevant privacy laws and rules, examples of how these laws and rules affect daily business practices, and sample forms that can be adopted for use in the quest to design an appropriate business strategy of compliance. It is an essential tool for agents in the ever-expanding world of insurance regulation -- and one that is available only to PIA members.

Once the final version of the tools kit is launched on PIANET, members need only to log on to the National website to access the manual. It will be loaded as an .html document with easy-to-use links to the various sections on GLBA, FCRA, HIPAA, CAN-SPAM and the “do not call” and “do not fax” rules. The tools kit will also contain sample forms in Microsoft Word format that can be downloaded and used for compliance with the privacy laws.  To ease the burden of understanding some of the more complex laws, examples of compliance and a “frequently asked questions” section will illustrate common situations with privacy compliance implications that an agent will face during the regular course of business.

Links will also be available from the tools kit web page to state-specific laws that are sent to PIA National from state affiliates. These state-specific links will contain any state laws that differ from the instructions set forth by the federal laws described in the tools kit. Remember that for most privacy laws, federal law only preempts state law if the state law does not provide as much protection as the federal law. Therefore, if an agent’s home state (or any state in which the agent does business) adopts privacy requirements that are more strict than the federal requirements, then the agent will be required to adhere to the state requirements. While most states have incorporated the federal laws in their jurisdictions, the state-specific links to the tools kit will highlight to the agent where they diverge from federal law and therefore must be followed.

In addition to the wealth of information the tools kit contains in its original form, it will also be continuously amended and updated to reflect changes in privacy laws. For instance, on July 1, 2005, when the “do-not-fax” rules are set to change, that section of the kit will be updated with an alert to be attached to remind members to check for the changes. This service will ensure that members have the most current privacy laws available to them and will significantly ease the compliance burden.

PIA is excited to bring this valuable service to its members in an easy-to-use and convenient format. The tools kit will be available to members beginning in late October, so remember to take advantage of this important service.

Timothy Kovac  timko@pianet.org is director of business and compliance affairs for PIA National.

This article originally appeared in the October 2004 PIA Connection.