Brief ⁽¹⁾

HB 2480, as amended, concerns the privacy of consumer financial and health information and amends the Insurance Commissioner's authority to adopt privacy rules and regulations regarding the disclosure of nonpublic personal information described in Title V of the Gramm-Leach-Bliley Act of 1999 (Public Law 106-102). The privacy regulations adopted by the Commissioner must be consistent with and not more restrictive than the model regulations adopted on September 26, 2000, by the National Association of Insurance Commissioners entitled Privacy of Consumer Financial and Health Information Regulation.

Any rule and regulation adopted by the Commissioner to implement Article V of the model regulations, Rules for Health Information, shall become effective on and after February 1, 2002.

Further, persons subject to regulations governing nonpublic personal information disclosure are deemed to be in compliance with the regulations of the Insurance Commissioner which implement Article V of the model regulation upon a showing of a good faith effort to comply with the Commissioner's rules and regulations or the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191) and regulations adopted pursuant to that act. The provisions of this section expire on April 14, 2003.

Senate Committee of the Whole amendments assure that rules and regulations adopted under the authority of this bill do not preempt, supersede, or are not inconsistent with existing laws requiring notification or consent of parents, guardians, or other legal custodian relating to the health and medical treatment for a minor.

Background

HB 2480 changes the rule-making authority given the Insurance Commissioner by the Legislature in the 2000 Session to adopt rules and regulations consistent with and not more restrictive than standards contained in regulations promulgated under Gramm-Leach-Bliley by federal regulatory agencies governing financial institutions. The federal financial regulators have adopted financial privacy rules and regulations which include health information as financial information. The National Association of Insurance Commissioners (NAIC) believes that health information should be treated differently than financial information and have proposed to state legislatures a model regulation containing Article V which establishes that different method for disclosing nonpublic personal information.

HB 2480 authorizes the Kansas Insurance Commissioner to adopt the model regulations proposed by the NAIC, but delays the effective date of Article V of those regulations until February 1, 2002. While those subject to the regulations prepare for compliance, they will be deemed to be in compliance if they meet the requirements of a different set of federal privacy rules and regulations adopted by the Department of Health and Human Services to implement the Health Insurance Portability and Accountability Act (HIPPA). The HIPPA regulations become effective on April 14, 2001, with a compliance date of April 14, 2003 (April 14, 2004 for small health plans).

The fiscal note provided by the Division of the Budget indicates the Department of Insurance would be able to implement HB 2480 within current operating and staffing levels.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi