Insurance industry lobbyists acknowledge that the financial services industry could come under some expensive and restrictive privacy compliance rules next year if Congress follows through on plans to hold extensive hearings on the issue.Indeed, Congress could decide to write new laws mandating that consumers be allowed to "opt-in" to sharing of financial data given to one unit of a financial services company with another unit. Currently, the policy at both the state and federal level is that consumers have the right to "opt-out" of companies' cross-marketing programs.

Such legislation, or even regulation by federal or state agencies mandating such an approach, would be difficult for most financial services companies, but "enormous" for insurance companies because of the so-called "legacy" issue, warns Bill Paukovitz, chief of privacy for Firemen's Fund Insurance Co., Novato, Calif.

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