230-RICR-20-60-7
230-RICR-20-60-7. Privacy of Consumer Information (formerly Insurance Regulation 99) (version Technical Revision, 12/19/2001 to 05/14/2018)
State of Rhode Island and Providence Plantation
DEPARTMENT OF BUSINESS REGULATION
Division of Insurance
1511 Pontiac Avenue
Cranston, RI 02920
REGULATION 99
PRIVACY OF CONSUMER FINANCIAL INFORMATION
Table of Contents
Section 1.
Authority
Section 2.
Purpose and Scope
Section 3.
Rule of Construction
Section 4.
Definitions
Section 5.
Initial Privacy Notice to Consumers Required
Section 6.
Annual Privacy Notice to Customers Required
Section 7.
Information to be Included in Privacy Notices
Section 8.
Form of Opt Out Notice to Consumers and Opt Out Methods
Section 9.
Revised Privacy Notices
Section 10.
Delivery
Section 11.
Limitation on Disclosure of Nonpublic Personal Financial Information to
Nonaffiliated Third Parties
Section 12.
Limits on Redisclosure and Reuse of Nonpublic Personal Financial Information
Section 13.
Limits on Sharing Account Number Information for Marketing Purposes
Section 14.
Exception to Opt Out Requirements for Disclosure of Nonpublic Personal
Financial Information for Service Providers and Joint Marketing
Section 15.
Exceptions to Notice and Opt Out Requirements for Disclosure of Nonpublic
Personal Financial Information for Processing and Servicing Transactions
Section 16.
Other Exceptions to Notice and Opt Out Requirements for Disclosure of
Nonpublic Personal Financial Information
Section 17.
Protection of Fair Credit Reporting Act
Section 18.
Nondiscrimination
Section 19.
Violation
Section 20.
Severability
Section 21.
Effective Date
Appendix A –Sample Clauses
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Section 1.
Authority
This Regulation is promulgated pursuant to the authority granted by R.I. Gen. Laws §§ 27-58-4
and 42-14-17.
Section 2.
Purpose and Scope
A.
Purpose. This Regulation governs the treatment of nonpublic personal financial
information about individuals by all insurance licensees of the Rhode Island
Department of Business Regulation. This Regulation:
(1)
Requires a licensee to provide notice to individuals about its privacy
policies and practices;
(2)
Describes the conditions under which a licensee may disclose nonpublic
personal financial information about individuals to affiliates and
nonaffiliated third parties; and
(3)
Provides methods for individuals to prevent a licensee from disclosing that
information.
B.
Scope. This Regulation applies to nonpublic personal financial information about
individuals who obtain or are claimants or beneficiaries of products or services
primarily for personal, family or household purposes from licensees. This
Regulation does not apply to information about companies or about individuals
who obtain products or services for business, commercial or agricultural purposes.
Nothing in this Regulation shall be construed to modify, limit or supercede the
operation of the Rhode Island Workers’ Compensation Act (R.I. Gen. Laws § 28-
29-1 et seq.) and the health care provider’s obligation to provide information
directly related to a claim for workers’ compensation benefits or any proceeding
before the Workers’ Compensation Court, or any proceeding relating to workers’
compensation including, but not limited to, actions seeking benefits under the
Longshore and Harbor Workers Compensation Act (33 U.S.C. § 901 et seq.) or
the Police Officers and Firefighters Relief Statute (R.I. Gen. Laws § 45-19-1 et
seq.)
C.
Compliance. A licensee domiciled in this state that is in compliance with this
Regulation in a state that has not enacted laws or regulations that meet the
requirements of Title V of the Gramm-Leach-Bliley Act (PL 102-106) may
nonetheless be deemed to be in compliance with Title V of the Gramm-Leach-
Bliley Act in the other state.
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Section 3.
Rule of Construction
The examples in this Regulation and the sample clauses in Appendix A of this Regulation are not
exclusive. Compliance with an example or use of a sample clause, to the extent applicable,
constitutes compliance with this Regulation.
Section 4.
Definitions
As used in this Regulation, unless the context requires otherwise:
A.
“Affiliate” means a company that controls, is controlled by or is under common
control with another company.
B.
(1)
“Clear and conspicuous” means that a notice is reasonably understandable
and designed to call attention to the nature and significance of the
information in the notice.
(2)
Examples.
(a)
Reasonably understandable. A licensee makes its notice reasonably
understandable if it:
(i)
presents the information in the notice in clear, concise
sentences, paragraphs and sections;
(ii)
uses short explanatory sentences or bullet lists whenever
possible;
(iii)
uses definite, concrete, everyday words and active voice
whenever possible;
(iv)
avoids multiple negatives;
(v)
avoids legal and highly technical business terminology
whenever possible; and
(vi)
avoids explanations that are imprecise and readily subject
to different interpretations.
(b)
Designed to call attention. A licensee designs its notice to call
attention to the nature and significance of the information in it if
the licensee:
(i)
uses a plain-language heading to call attention to the notice;
(ii)
uses a typeface and type size that are easy to read;
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(iii)
provides wide margins and ample line spacing;
(iv)
uses boldface or italics for key words; and
(v)
is in a form that combines the licensee’s notice with other
information, uses distinctive type size, style, and graphic
devices, such as shading or sidebars.
(c)
Notices on web sites. If a licensee provides a notice on a web page,
the licensee designs its notice to call attention to the nature and
significance of the information in it if the licensee uses text or
visual cues to encourage scrolling down the page if necessary to
view the entire notice and ensure that other elements on the web
site (such as text, graphics, hyperlinks or sound) do not distract
attention from the notice, and the licensee either:
(i)
places the notice on a screen that consumers frequently
access, such as a page on which transactions are conducted;
or
(ii)
places a link on a screen that consumers frequently access,
such as a page on which transactions are conducted, that
connects directly to the notice and is labeled appropriately
to convey the importance, nature and relevance of the
notice.
C.
“Collect” means to obtain information that the licensee organizes or can retrieve
by the name of an individual or by identifying number, symbol or other
identifying particular assigned to the individual, irrespective of the source of the
underlying information.
D.
“Company” means a corporation, limited liability company, business trust,
general or limited partnership, association, sole proprietorship or similar
organization.
E.
(1)
“Consumer” means an individual who seeks to obtain, obtains or has
obtained an insurance product or service from a licensee that is to be used
primarily for personal, family or household purposes, and about whom the
licensee has nonpublic personal financial information, or that individual’s
legal representative.
(2)
Examples.
(a)
An individual who provides nonpublic personal financial
information to a licensee in connection with obtaining or seeking
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to obtain financial, investment or economic advisory services
relating to an insurance product or service is a consumer regardless
of whether the licensee establishes an ongoing advisory
relationship.
(b)
An applicant for insurance prior to the inception of insurance
coverage is a licensee’s consumer.
(c)
An individual who is a consumer of another financial institution is
not a licensee’s consumer solely because the licensee is acting as
agent for, or provides processing or other services to, that financial
institution.
(d)
An individual is a licensee’s consumer if:
(i)
(I)
the individual is a beneficiary of a life insurance
policy underwritten by the licensee;
(II)
the individual is a claimant under an insurance
policy issued by the licensee;
(III)
the individual is an insured or an annuitant under an
insurance policy or an annuity, respectively, issued
by the licensee; or
(IV)
the individual is a mortgagor of a mortgage covered
under a mortgage insurance policy; and
(ii)
the licensee discloses nonpublic personal financial
information about the individual to a nonaffiliated third
party other than as permitted under Sections 14, 15 and 16
of this Regulation.
(e)
Provided that the licensee provides the initial, annual and revised
notices under Sections 5, 6 and 9 of this Regulation to the plan
sponsor, group or blanket insurance policyholder or group annuity
contract holder, and further provided that the licensee does not
disclose to a nonaffiliated third party nonpublic personal financial
information about such an individual other than as permitted under
Sections 14, 15 and 16 of this Regulation, an individual is not the
consumer of the licensee solely because he or she is:
(i)
a participant or a beneficiary of an employee benefit plan
that the licensee administers or sponsors or for which the
licensee acts as a trustee, insurer or fiduciary;
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(ii)
covered under a group or blanket insurance policy or group
annuity contract issued by the licensee; or
(iii)
a beneficiary in a workers’ compensation plan.
(f)
(i)
The individuals described in Section 4(E)(e)(i) through (iii)
above are consumers of a licensee if the licensee does not
meet all the conditions of Section (e).
(ii)
In no event shall the individuals, solely by virtue of the
status described in Section 4(E)(e)(i) through (iii) above, be
deemed to be customers for purposes of this Regulation.
(g)
An individual is not a licensee’s consumer solely because he or she
is a beneficiary of a trust for which the licensee is a trustee.
(h)
An individual is not a licensee’s consumer solely because he or she
has designated the licensee as trustee for a trust.
F.
“Consumer reporting agency” has the same meaning as in Section 603(f) of the
federal Fair Credit Reporting Act (15 U.S.C. § 1681a(f)).
G.
“Control” means:
(1)
ownership, control or power to vote twenty-five percent (25%) or more of
the outstanding shares of any class of voting security of the company,
directly or indirectly, or acting through one or more other persons;
(2)
control in any manner over the election of a majority of the directors,
trustees or general partners (or individuals exercising similar functions) of
the company; or
(3)
the power to exercise, directly or indirectly, a controlling influence over
the management or policies of the company, as the Director determines.
H.
“Customer” means a consumer who has a customer relationship with a licensee.
I.
(1)
“Customer relationship” means a continuing relationship between a
consumer and a licensee under which the licensee provides one or more
insurance products or services to the consumer that are to be used
primarily for personal, family or household purposes.
(2)
Examples.
(a)
A consumer has a continuing relationship with a licensee if:
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(i)
The consumer is a current policyholder of an insurance
product issued by or through the licensee; or
(ii)
The consumer obtains financial, investment or economic
advisory services relating to an insurance product or service
from the licensee for a fee.
(b)
A consumer does not have a continuing relationship with a licensee
if:
(i)
the consumer applies for insurance but does not purchase
the insurance;
(ii)
the licensee sells the consumer travel insurance in an
isolated transaction;
(iii)
the individual is no longer a current policyholder of an
insurance product or no longer obtains insurance services
with or through the licensee;
(iv)
the consumer is a beneficiary or claimant under a policy
and has submitted a claim under a policy choosing a
settlement option involving an ongoing relationship with
the licensee;
(v)
the consumer is a beneficiary or a claimant under a policy
and has submitted a claim under that policy choosing a
lump sum settlement option;
(vi)
the customer’s policy is lapsed, expired, or otherwise
inactive or dormant under the licensee’s business practices,
and the licensee has not communicated with the customer
about the relationship for a period of twelve (12)
consecutive months, other than annual privacy notices,
material required by law or regulation, communication at
the direction of a state or federal authority, or promotional
materials;
(vii)
the individual is an insured or an annuitant under an
insurance policy or annuity, respectively, but is not the
policyholder or owner of the insurance policy or annuity; or
(viii) for the purposes of this Regulation, the individual’s last
known address according to the licensee’s records is
deemed invalid. An address of record is deemed invalid if
mail sent to that address by the licensee has been returned
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by the postal authorities as undeliverable and if subsequent
attempts by the licensee to obtain a current valid address
for the individual have been unsuccessful.
J.
“Director” means the Director of the Rhode Island Department of Business
Regulation.
K.
(1)
“Financial institution” means any institution the business of which is
engaging in activities that are financial in nature or incidental to such
financial activities as described in Section 4(k) of the Bank Holding
Company Act of 1956 (12 U.S.C. § 1843(k)).
(2)
Financial institution does not include:
(a)
any person or entity with respect to any financial activity that is
subject to the jurisdiction of the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. § 1 et
seq.);
(b)
the Federal Agricultural Mortgage Corporation or any entity
charged and operating under the Farm Credit Act of 1971 (12
U.S.C. § 2001 et seq.); or
(c)
institutions chartered by Congress specifically to engage in
securitizations, secondary market sales (including sales of
servicing rights) or similar transactions related to a transaction of a
consumer, as long as the institutions do not sell or transfer
nonpublic personal financial information to a nonaffiliated third
party.
L.
(1)
“Financial product or service” means a product or service that a financial
holding company could offer by engaging in an activity that is financial in
nature or incidental to such a financial activity under Section 4(k) of the
Bank Holding Company Act of 1956 (12 U.S.C. § 1843(k)).
(2)
Financial service includes a financial institution’s evaluation or brokerage
of information that the financial institution collects in connection with a
request or an application from a consumer for a financial product or
service.
M.
(1)
“Insurance product or service” means any product or service that is
offered by a licensee pursuant to the insurance laws of this state.
(2)
Insurance service includes a licensee's evaluation, brokerage or
distribution of information that the licensee collects in connection with a
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request or an application from a consumer for a insurance product or
service.
N.
(1)
“Licensee” means all licensed insurers, producers and other persons
licensed or required to be licensed, or authorized or required to be
authorized, or registered or required to be registered pursuant to Chapter
27 of the Rhode Island General Laws.
(2)
A licensee is not subject to the notice and opt out requirements for
nonpublic personal financial information of this Regulation if the licensee
is an employee, agent or other representative of another licensee (“the
principal”) and:
(a)
the principal otherwise complies with, and provides the notices
required by, the provisions of this Regulation; and
(b)
the licensee does not disclose any nonpublic personal financial
information to any person other than the principal or its affiliates in
a manner permitted by this Regulation.
(3)
(a)
Subject to Section (b) below, “licensee” shall also include an
approved surplus insurer that accepts business placed through a
licensed surplus lines broker in this state, but only in regard to the
surplus lines placements placed pursuant to R.I. Gen. Laws §§ 27-
3-38 through 27-3-42.
(b)
A surplus lines broker or insurer shall be deemed to be in
compliance with the notice and opt out requirements for nonpublic
personal financial information of this Regulation provided:
(i)
The broker or insurer does not disclose nonpublic personal
financial information of a consumer or a customer to
nonaffiliated third parties for any purpose, including joint
servicing or marketing under Section 14 of this Regulation,
except as permitted by Section 15 or 16 of this Regulation;
and
(ii)
The broker or insurer delivers a notice to the consumer at
the time a customer relationship is established on which the
following is printed in 16-point type:
PRIVACY NOTICE
“Neither the U.S. brokers that handled this insurance nor
the insurers that have underwritten this insurance will
disclose
nonpublic
personal
financial
information
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concerning the buyer to nonaffiliates of the brokers or
insurers except as permitted by law”.
O.
(1)
“Nonaffiliated third party” means any person except:
(a)
a licensee’s affiliate; or
(b)
a person employed jointly by a licensee and any company that is
not the licensee’s affiliate (but nonaffiliated third party includes
the other company that jointly employs the person).
(2)
Nonaffiliated third party includes any company that is an affiliate solely
by virtue of the direct or indirect ownership or control of the company by
the licensee or its affiliate in conducting merchant banking or investment
banking activities of the type described in Section 4(k)(4)(H) or insurance
company investment activities of the type described in Section 4(k)(4)(I)
of the federal Bank Holding Company Act (12 U.S.C. § 1843(k)(4)(H) and
(I).)
P.
(1)
“Nonpublic personal financial information” means:
(a)
personally identifiable financial information; and
(b)
any list, description or other grouping of consumers (and publicly
available information pertaining to them) that is derived using any
personally identifiable financial information that is not publicly
available.
(2)
Nonpublic personal financial information does not include:
(a)
health information;
(b)
publicly available information, except as included on a list
described in P(1)(b) above; or
(c)
any list, description or other grouping of consumers (and publicly
available information pertaining to them) that is derived without
using any personally identifiable financial information that is not
publicly available.
(3)
Examples of lists.
(a)
Nonpublic personal financial information includes any list of
individuals’ names and street addresses that is derived in whole or
in part using personally identifiable financial information that is
not publicly available, such as account numbers.
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(b)
Nonpublic personal financial information does not include any list
of individuals’ names and addresses that contains only publicly
available information, is not derived in whole or in part using
personally identifiable financial information that is not publicly
available, and is not disclosed in a manner that indicates that any
of the individuals on the list is a consumer of a financial
institution.
Q.
(1)
“Personally identifiable financial information” means any information:
(a)
a consumer provides to a licensee to obtain an insurance product or
service from the licensee;
(b)
about a consumer resulting from a transaction involving an
insurance product or service between a licensee and a consumer; or
(c)
the licensee otherwise obtains about a consumer in connection with
providing an insurance product or service to that consumer.
(2)
Examples.
(a)
Information included. Personally identifiable financial information
includes:
(i)
information a consumer provides to a licensee on an
application to obtain an insurance product or service;
(ii)
account balance information and payment history;
(iii)
the fact that an individual is or has been one of the
licensee’s customers or has obtained an insurance product
or service from the licensee;
(iv)
any information about the licensee’s consumer if it is
disclosed in a manner that indicates that the individual is or
has been the licensee’s consumer;
(v)
any information that a consumer provides to a licensee or
that the licensee or its agent otherwise obtains in
connection with collecting on a loan or servicing a loan;
(vi)
any information the licensee collects through an Internet
cookie (an information-collecting device from a web
server); and
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(vii)
information from a consumer report.
(b)
Information not included. Personally identifiable financial
information does not include:
(i)
health information;
(ii)
a list of names and addresses of customers of an entity that
is not a financial institution; and
(iii)
information that does not identify a consumer, such as
aggregate information or blind data that does not contain
personal identifiers such as account numbers, names or
addresses.
R.
(1)
“Publicly available information” means any information that a licensee
has a reasonable basis to believe is lawfully made available to the general
public from:
(a)
federal, state or local government records;
(b)
widely distributed media; or
(c)
disclosures to the general public that are required to be made by
federal, state or local law.
(2)
Reasonable basis. A licensee has a reasonable basis to believe that
information is lawfully made available to the general public if the licensee
has taken steps to determine:
(a)
that the information is of the type that is available to the general
public; and
(b)
whether an individual can direct that the information not be made
available to the general public and, if so, that the licensee’s
consumer has not done so.
(3)
Examples.
(a)
Government records. Publicly available information in government
records includes information in government real estate records and
security interest filings.
(b)
Widely distributed media. Publicly available information from
widely distributed media includes information from a telephone
book, a television or radio program, a newspaper or a web site that
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is available to the general public on an unrestricted basis. A web
site is not restricted merely because an Internet service provider or
a site operator requires a fee or a password, so long as access is
available to the general public.
(c)
Reasonable basis.
(i)
A licensee has a reasonable basis to believe that mortgage
information is lawfully made available to the general public
if the licensee has determined that the information is of the
type included on the public record in the jurisdiction where
the mortgage would be recorded.
(ii)
A licensee has a reasonable basis to believe that an
individual’s telephone number is lawfully made available
to the general public if the licensee has located the
telephone number in the telephone book or the consumer
has informed you that the telephone number is not unlisted.
Section 5.
Initial Privacy Notice to Consumers Required
A.
Initial notice requirement. A licensee shall provide a clear and conspicuous notice
that accurately reflects its privacy policies and practices to:
(1)
Customer. An individual who becomes the licensee’s customer, not later
than when the licensee establishes a customer relationship, except as
provided in Section 5(E) below, and
(2)
Consumer. A consumer, before the licensee discloses any nonpublic
personal financial information about the consumer to any nonaffiliated
third party, if the licensee makes a disclosure other than as authorized by
Sections 15 and 16 of this Regulation.
B.
When initial notice to a consumer is not required. A licensee is not required to
provide an initial notice to a consumer under Section 5(A)(2) above if:
(1)
the licensee does not disclose any nonpublic personal financial
information about the consumer to any nonaffiliated third party, other than
as authorized by Sections 15 and 16 of this Regulation, and the licensee
does not have a customer relationship with the consumer; or
(2)
a notice has been provided by an affiliated licensee, as long as the notice
clearly identifies all licensees to whom the notice applies and is accurate
with respect to the licensee and the other institutions.
C.
When the licensee establishes a customer relationship.
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(1)
General rule. A licensee establishes a customer relationship at the time the
licensee and the consumer enter into a continuing relationship.
(2)
Examples of establishing customer relationship. A licensee establishes a
customer relationship when the consumer:
(a)
becomes a policyholder of a licensee that is an insurer when the
insurer delivers an insurance policy or contract to the consumer, or
in the case of a licensee that is an insurance producer or insurance
broker, obtains insurance through that licensee; or
(b)
agrees to obtain financial, economic or investment advisory
services relating to insurance products or services for a fee from
the licensee.
D.
Existing customers. When an existing customer obtains a new insurance product
or service from a licensee that is to be used primarily for personal, family or
household purposes, the licensee satisfies the initial notice requirements of
Section 5(A) above as follows:
(1)
the licensee may provide a revised policy notice, under Section 9 of this
Regulation, that covers the customer’s new insurance product or service;
or
(2)
if the initial, revised or annual notice that the licensee most recently
provided to that customer was accurate with respect to the new insurance
product or service, the licensee does not need to provide a new privacy
notice under Section 5(A) above.
E.
Exceptions to allow subsequent delivery of notice.
(1)
A licensee may provide the initial notice required by Section 5(A)(1)
above within a reasonable time after the licensee establishes a customer
relationship if:
(a)
establishing the customer relationship is not at the customer’s
election; or
(b)
providing notice not later than when the licensee establishes a
customer relationship would substantially delay the customer’s
transaction and the customer agrees to receive the notice at a later
time.
(2)
Examples of exceptions.
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(a)
Not at customer’s election. Establishing a customer relationship is
not at the customer’s election if a licensee acquires or is assigned a
customer’s policy from another financial institution or residual
market mechanism and the customer does not have a choice about
the licensee’s acquisition or assignment.
(b)
Substantial delay of customer’s transaction. Providing notice not
later than when a licensee establishes a customer relationship
would substantially delay the customer’s transaction when the
licensee and the individual agree over the telephone to enter into a
customer relationship involving prompt delivery of the insurance
product or service.
(c)
No substantial delay of customer’s transaction. Providing notice
not later than when a licensee establishes a customer relationship
would not substantially delay the customer’s transaction when the
relationship is initiated in person at the licensee’s office or through
other means by which the customer may view the notice, such as
on a web site.
F.
Delivery. When a licensee is required to deliver an initial privacy notice by this
Section, the licensee shall deliver it according to Section 10 of this Regulation. If
the licensee uses a short-form initial notice for non-customers according to
Section 7(D) of this Regulation, the licensee may deliver its privacy notice
according to Section 7(D)(3).
Section 6.
Annual Privacy Notice to Customers Required
A.
(1)
General rule. A licensee shall provide a clear and conspicuous notice to
customers that accurately reflects its privacy policies and practices not less
than annually during the continuation of the customer relationship.
Annually means at least once in any period of twelve (12) consecutive
months during which that relationship exists. A licensee may define the
twelve-consecutive-month period, but the licensee shall apply it to the
customer on a consistent basis.
(2)
Example. A licensee provides a notice annually if it defines the twelve-
consecutive-month period as a calendar year and provides the annual
notice to the customer once in each calendar year following the calendar
year in which the licensee provided the initial notice. For example, if a
customer opens an account on any day of year 1, the licensee shall provide
an annual notice to that customer by December 31 of year 2.
B.
(1)
Termination of customer relationship. A licensee is not required to provide
an annual notice to a former customer. A former customer is an individual
with whom a licensee no longer has a continuing relationship.
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(2)
Examples.
(a)
A licensee no longer has a continuing relationship with an
individual if the individual no longer is a current policyholder of
an insurance product or no longer obtains insurance services with
or through the licensee.
(b)
A licensee no longer has a continuing relationship with an
individual if the individual’s policy is lapsed, expired or otherwise
inactive or dormant under the licensee’s business practices, and the
licensee has not communicated with the customer about the
relationship for a period of twelve (12) consecutive months, other
than to provide annual privacy notices, material required by law or
regulation, or promotional materials.
(c)
For the purposes of this Regulation, a licensee no longer has a
continuing relationship with an individual if the individual’s last
known address according to the licensee’s records is deemed
invalid. An address of record is deemed invalid if mail sent to that
address by the licensee has been returned by the postal authorities
as undeliverable and if subsequent attempts by the licensee to
obtain a current valid address for the individual have been
unsuccessful.
(d)
A licensee no longer has a continuing relationship with a customer
in the case of providing real estate settlement services, at the time
the customer completes execution of all documents related to the
real estate closing, payment for those services has been received,
or the licensee has completed all of its responsibilities with respect
to the settlement, including filing documents on the public record,
whichever is later.
D.
Delivery. When a licensee is required by this section to deliver an annual privacy
notice, the licensee shall deliver it according to Section 10 of this Regulation.
Section 7.
Information to be Included in Privacy Notices
A.
General rule. The initial, annual and revised privacy notices that a licensee
provides under Sections 5, 6 and 9 of this Regulation shall include each of the
following items of information, in addition to any other information the licensee
wishes to provide, that applies to the licensee and to the consumers to whom the
licensee sends its privacy notice:
(1)
the categories of nonpublic personal financial information that the licensee
collects;
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(2)
the categories of nonpublic personal financial information that the licensee
discloses;
(3)
the categories of affiliates and nonaffiliated third parties to whom the
licensee discloses nonpublic personal financial information, other than
those parties to whom the licensee discloses information under Sections 15
and 16 of this Regulation;
(4)
the categories of nonpublic personal financial information about the
licensee’s former customers that the licensee discloses and the categories
of affiliates and nonaffiliated third parties to whom the licensee discloses
nonpublic personal financial information about the licensee’s former
customers, other than those parties to whom the licensee discloses
information under Sections 15 and 16 of this Regulation;
(5)
if a licensee discloses nonpublic personal financial information to a
nonaffiliated third party under Section 14 of this Regulation (and no other
exception in Sections 15 and 16 of this Regulation applies to that
disclosure), a separate description of the categories of information the
licensee discloses and the categories of third parties with whom the
licensee has contracted;
(6)
an explanation of the consumer’s right under Section 11(A) of this
Regulation to opt out of the disclosure of nonpublic personal financial
information to nonaffiliated third parties, including the methods by which
the consumer may exercise that right at that time;
(7)
any disclosures that the licensee makes under Section 603(d)(2)(A)(iii) of
the federal Fair Credit Reporting Act (15 U.S.C. § 1681a(d)(2)(A)(iii))
(that is, notices regarding the ability to opt out of disclosures of
information among affiliates);
(8)
the licensee’s policies and practices with respect to protecting the
confidentiality and security of nonpublic personal financial information;
and
(9)
any disclosure that the licensee makes under Section 7(B).
B.
Description of parties subject to exceptions. If a licensee discloses nonpublic
personal financial information as authorized under Sections 15 and 16 of this
Regulation, the licensee is not required to list those exceptions in the initial or
annual privacy notices required by Sections 5 and 6 of this Regulation. When
describing the categories of parties to whom disclosure is made, the licensee is
required to state only that it makes disclosures to other affiliated or nonaffiliated
third parties, as applicable, as permitted by law.
18
C.
Examples.
(1)
Categories of nonpublic personal financial information that the licensee
collects. A licensee satisfies the requirement to categorize the nonpublic
personal financial information it collects if the licensee categorizes it
according to the source of the information, as applicable:
(a)
information from the consumer;
(b)
information about the consumer’s transactions with the licensee or
its affiliates;
(c)
information about the consumer’s transactions with nonaffiliated
third parties; and
(d)
information from a consumer reporting agency.
(2)
Categories of nonpublic personal financial information a licensee
discloses.
(a)
A licensee satisfies the requirement to categorize nonpublic
personal financial information it discloses if the licensee
categorizes the information according to source, as described in
Section 7(C)(1) above, as applicable, and provides a few examples
to illustrate the types of information in each category. These might
include:
(i)
information from the consumer, including application
information, such as assets and income and identifying
information, such as name, address and social security
number;
(ii)
transaction information, such as information about
balances, payment history and parties to the transaction;
and
(iii)
information from consumer reports, such as a consumer’s
creditworthiness and credit history.
(b)
A licensee does not adequately categorize the information that it
discloses if the licensee uses only general terms, such as
transaction information about the consumer.
(c)
If a licensee reserves the right to disclose all of the nonpublic
personal financial information about consumers that it collects, the
licensee may simply state that fact without describing the
19
categories or examples of nonpublic personal financial information
that the licensee discloses.
(3)
Categories of affiliates and nonaffiliated third parties to whom the licensee
discloses.
(a)
A licensee satisfies the requirement to categorize the affiliates and
nonaffiliated third parties to which the licensee discloses nonpublic
personal financial information about consumers if the licensee
identifies the types of businesses in which they engage.
(b)
Types of businesses may be described by general terms only if the
licensee uses a few illustrative examples of significant lines of
business. For example, a licensee may use the term financial
products or services if it includes appropriate examples of
significant lines of businesses, such as life insurer, automobile
insurer, consumer banking or securities brokerage.
(c)
A licensee also may categorize the affiliates and nonaffiliated third
parties to which it discloses nonpublic personal financial
information about consumers using more detailed categories.
(4)
Disclosures under exception for service providers and joint marketers. If a
licensee discloses nonpublic personal financial information under the
exception in Section 14 of this Regulation to a nonaffiliated third party to
market products or services that it offers alone or jointly with another
financial institution, the licensee satisfies the disclosure requirement of
Section 7(A)(5) above if it:
(a)
Lists the categories of nonpublic personal financial information it
discloses, using the same categories and examples the licensee
used to meet the requirements of Section 7(A)(2) above, as
applicable; and
(b)
States whether the third party is:
(i)
a service provider that performs marketing services on the
licensee’s behalf or on behalf of the licensee and another
financial institution; or
(ii)
a financial institution with whom the licensee has a joint
marketing agreement.
(5)
Simplified notices. If a licensee does not disclose, and does not wish to
reserve the right to disclose, nonpublic personal financial information
about customers or former customers to affiliates or nonaffiliated third
20
parties except as authorized under Sections 15 and 16 of this Regulation,
the licensee may simply state that fact, in addition to the information it
shall provide under Sections 7(A)(1), (A)(8), (A)(9) and (B).
(6)
Confidentiality and security. A licensee describes its policies and practices
with respect to protecting the confidentiality and security of nonpublic
personal financial information if it does both of the following:
(a)
describes in general terms who is authorized to have access to the
information; and
(b)
states whether the licensee has security practices and procedures in
place to ensure the confidentiality of the information in accordance
with the licensee’s policy. The licensee is not required to describe
technical information about the safeguards it uses.
D.
Short-form initial notice with opt out notice for non-customers.
(1)
A licensee may satisfy the initial notice requirements in Sections 5(A)(2)
and 8(C) of this Regulation for a consumer who is not a customer by
providing a short-form initial notice at the same time as the licensee
delivers an opt out notice as required in Section 8 of this Regulation.
(2)
A short-form initial notice shall:
(a)
be clear and conspicuous;
(b)
state that the licensee’s privacy notice is available upon request;
and
(c)
explain a reasonable means by which the consumer may obtain that
notice.
(3)
The licensee shall deliver its short-form initial notice according to Section
10 of this Regulation. The licensee is not required to deliver its privacy
notice with its short-form initial notice. The licensee instead may simply
provide the consumer a reasonable means to obtain its privacy notice. If a
consumer who receives the licensee’s short-form notice requests the
licensee’s privacy notice, the licensee shall deliver its privacy notice
according to Section 10 of this Regulation.
(4)
Examples of obtaining privacy notice. The licensee provides a reasonable
means by which a consumer may obtain a copy of its privacy notice if the
licensee:
21
(a)
provides a toll-free telephone number that the consumer may call
to request the notice; or
(b)
for a consumer who conducts business in person at the licensee’s
office, maintains copies of the notice on hand that the licensee
provides to the consumer immediately upon request.
E.
Future disclosures. The licensee’s notice may include:
(1)
categories of nonpublic personal financial information that the licensee
reserves the right to disclose in the future, but does not currently disclose;
and
(2)
categories of affiliates or nonaffiliated third parties to whom the licensee
reserves the right in the future to disclose, but to whom the licensee does
not currently disclose, nonpublic personal financial information.
F.
Sample clauses. Sample clauses illustrating some of the notice content required by
this section are included in Appendix A of this Regulation.
Section 8.
Form of Opt Out Notice to Consumers and Opt Out Methods
A.
(1)
Form of opt out notice. If a licensee is required to provide an opt out
notice under Section 11(A) of this Regulation, it shall provide a clear and
conspicuous notice to each of its consumers that accurately explains the
right to opt out under that Section. The notice shall state:
(a)
that the licensee discloses or reserves the right to disclose
nonpublic personal financial information about its consumer to a
nonaffiliated third party;
(b)
that the consumer has the right to opt out of that disclosure; and
(c)
a reasonable means by which the consumer may exercise the opt
out right.
(2)
Examples.
(a)
Adequate opt out notice. A licensee provides adequate notice that
the consumer can opt out of the disclosure of nonpublic personal
financial information to a nonaffiliated third party if the licensee:
(i)
identifies all of the categories of nonpublic personal
financial information that it discloses or reserves the right
to disclose, and all of the categories of nonaffiliated third
parties to which the licensee discloses the information, as
22
described in Section 7(A)(2) and (3) of this Regulation, and
states that the consumer can opt out of the disclosure of that
information; and
(ii)
identifies the insurance products or services that the
consumer obtains from the licensee, either singly or jointly,
to which the opt out direction would apply.
(b)
Reasonable opt out means. A licensee provides a reasonable means
to exercise an opt out right if it:
(i)
designates check-off boxes in a prominent position on the
relevant forms with the opt out notice;
(ii)
includes a reply form together with the opt out notice;
(iii)
provides an electronic means to opt out, such as a form that
can be sent via electronic mail or a process at the licensee’s
web site, if the consumer agrees to the electronic delivery
of information; or
(iv)
provides a toll-free telephone number that consumers may
call to opt out.
(c)
Unreasonable opt out means. A licensee does not provide a
reasonable means of opting out if:
(i)
the only means of opting out is for the consumer to write
his or her own letter to exercise that opt out right; or
(ii)
the only means of opting out as described in any notice
subsequent to the initial notice is to use a check-off box
that the licensee provided with the initial notice but did not
include with the subsequent notice.
(d)
Specific opt out means. A licensee may require each consumer to
opt out through a specific means, as long as that means is
reasonable for that consumer.
B.
Same form as initial notice permitted. A licensee may provide the opt out notice
together with or on the same written or electronic form as the initial notice the
licensee provides in accordance with Section 5 of this Regulation.
C.
Initial notice required when opt out notice delivered subsequent to initial notice. If
a licensee provides the opt out notice later than required for the initial notice in
23
accordance with Section 5, the licensee shall also include a copy of the initial
notice with the opt out notice in writing or, if the consumer agrees, electronically.
D.
Joint relationships.
(1)
If two (2) or more consumers jointly obtain an insurance product or
service from a licensee, the licensee may provide a single opt out notice.
The licensee’s opt out notice shall explain how the licensee will treat an
opt out direction by a joint consumer (as explained in 8(D)(5) below).
(2)
Any of the joint consumers may exercise the right to opt out. The licensee
may either:
(a)
treat an opt out direction by a joint consumer as applying to all of
the associated joint consumers; or
(b)
permit each joint consumer to opt out separately.
(3)
If a licensee permits each joint consumer to opt out separately, the licensee
shall permit one of the joint consumers to opt out on behalf of all of the
joint consumers.
(4)
A licensee may not require all joint consumers to opt out before it
implements any opt out direction.
(5)
Example. If John and Mary are both named policyholders on a
homeowner’s insurance policy issued by a licensee and the licensee sends
policy statements to John’s address, the licensee may do any of the
following, but it shall explain in its opt out notice which opt out policy the
licensee will follow:
(a)
Send a single opt out notice to John’s address, but the licensee
shall accept an opt out direction from either John or Mary.
(b)
Treat an opt out direction by either John or Mary as applying to the
entire policy. If the licensee does so and John opts out, the licensee
may not require Mary to opt out as well before implementing
John’s opt out direction.
(c)
Permit John and Mary to make different opt out directions. If the
licensee does so:
(i)
it shall permit John and Mary to opt out for each other;
24
(ii)
if both opt out, the licensee shall permit both of them to
notify it in a single response (such as on a form or through
a telephone call); and
(iii)
if John opts out and Mary does not, the licensee may only
disclose nonpublic personal financial information about
Mary, but not about John and not about John and Mary
jointly.
E.
Time to comply with opt out. A licensee shall comply with a consumer’s opt out
direction as soon as reasonably practicable after the licensee receives it.
F.
Continuing right to opt out. A consumer may exercise the right to opt out at any
time.
G.
Duration of consumer’s opt out direction.
(1)
A consumer’s direction to opt out under this section is effective until the
consumer revokes it in writing or, if the consumer agrees, electronically.
(2)
When a customer relationship terminates, the customer’s opt out direction
continues to apply to the nonpublic personal financial information that the
licensee collected during or related to that relationship. If the individual
subsequently establishes a new customer relationship with the licensee, the
opt out direction that applied to the former relationship does not apply to
the new relationship.
H.
Delivery. When a licensee is required to deliver an opt out notice by this section,
the licensee shall deliver it according to Section 10 of this Regulation.
Section 9.
Revised Privacy Notices
A.
General rule. Except as otherwise authorized in this Regulation, a licensee shall
not, directly or through an affiliate, disclose any nonpublic personal financial
information about a consumer to a nonaffiliated third party other than as described
in the initial notice that the licensee provided to that consumer under Section 5 of
this Regulation, unless:
(1)
the licensee has provided to the consumer a clear and conspicuous revised
notice that accurately describes its policies and practices;
(2)
the licensee has provided to the consumer a new opt out notice;
(3)
the licensee has given the consumer a reasonable opportunity, before the
licensee discloses the information to the nonaffiliated third party, to opt
out of the disclosure; and
25
(4)
the consumer does not opt out.
B.
Examples.
(1)
Except as otherwise permitted by Sections 14, 15 and 16 of this
Regulation, a licensee shall provide a revised notice before it:
(a)
discloses a new category of nonpublic personal financial
information to any nonaffiliated third party;
(b)
discloses nonpublic personal financial information to a new
category of nonaffiliated third party; or
(c)
discloses nonpublic personal financial information about a former
customer to a nonaffiliated third party, if that former customer has
not had the opportunity to exercise an opt out right regarding that
disclosure.
(2)
A revised notice is not required if the licensee discloses nonpublic
personal financial information to a new nonaffiliated third party that the
licensee adequately described in its prior notice.
C.
Delivery. When a licensee is required to deliver a revised privacy notice by this
section, the licensee shall deliver it according to Section 10 of this Regulation.
Section 10.
Delivery
A.
How to provide notices. A licensee shall provide any notices that this Regulation
requires so that each consumer can reasonably be expected to receive actual
notice in writing or, if the consumer agrees, electronically.
B.
(1)
Examples of reasonable expectation of actual notice. A licensee may
reasonably expect that a consumer will receive actual notice if the
licensee:
(a)
hand-delivers a printed copy of the notice to the consumer;
(b)
mails a printed copy of the notice to the last known address of the
consumer separately, or in a policy, billing or other written
communication;
(c)
for a consumer who conducts transactions electronically, posts the
notice on the electronic site and requires the consumer to
acknowledge receipt of the notice as a necessary step to obtaining
a particular insurance product or service, or
26
(d)
for an isolated transaction with a consumer, such as the licensee
providing an insurance quote or selling the consumer travel
insurance, posts the notice and requires the consumer to
acknowledge receipt of the notice as a necessary step to obtaining
the particular insurance product or service.
(2)
Examples of unreasonable expectation of actual notice. A licensee may
not, however, reasonably expect that a consumer will receive actual notice
of its privacy policies and practices if it:
(a)
only posts a sign in its office or generally publishes advertisements
of its privacy policies and practices; or
(b)
sends the notice via electronic mail to a consumer who does not
obtain an insurance product or service from the licensee
electronically.
C.
Annual notices only. A licensee may reasonably expect that a customer will
receive actual notice of the licensee’s annual privacy notice if:
(1)
the customer uses the licensee’s web site to access insurance products and
services electronically and agrees to receive notices at the web site and the
licensee posts its current privacy notice continuously in a clear and
conspicuous manner on the web site; or
(2)
the customer has requested that the licensee refrain from sending any
information regarding the customer relationship, and the licensee’s current
privacy notice remains available to the customer upon request.
D.
Oral description of notice insufficient. A licensee may not provide any notice
required by this Regulation solely by orally explaining the notice, either in person
or over the telephone.
E.
Retention or accessibility of notices for customers.
(1)
For customers only, a licensee shall provide the initial notice required by
Section 5(A)(1), the annual notice required by Section 6(A), and the
revised notice required by Section 9 so that the customer can retain them
or obtain them later in writing or, if the customer agrees, electronically.
(2)
Examples of retention or accessibility. A licensee provides a privacy
notice to the customer so that the customer can retain it or obtain it later if
the licensee:
(a)
hand-delivers a printed copy of the notice to the customer;
27
(b)
mails a printed copy of the notice to the last known address of the
customer; or
(c)
makes its current privacy notice available on a web site (or a link
to another web site) for the customer who obtains an insurance
product or service electronically and agrees to receive the notice at
the web site.
F.
Joint notice with other financial institutions. A licensee may provide a joint notice
from the licensee and one or more of its affiliates or other financial institutions, as
identified in the notice, as long as the notice is accurate with respect to the
licensee and the other institutions. A licensee also may provide a notice on behalf
of another financial institution.
G.
Joint relationships. If two (2) or more consumers jointly obtain an insurance
product or service from a licensee, the licensee may satisfy the initial, annual and
revised notice requirements of Sections 5(A), 6(A) and 9(A) of this Regulation,
respectively, by providing one (1) notice to those consumers jointly.
Section 11.
Limits on Disclosure of Nonpublic Personal Financial Information to
Nonaffiliated Third Parties
A.
(1)
Conditions for disclosure. Except as otherwise authorized in this
Regulation, a licensee may not, directly or through any affiliate, disclose
any nonpublic personal financial information about a consumer to a
nonaffiliated third party unless:
(a)
the licensee has provided to the consumer an initial notice as
required under Section 5 of this Regulation;
(b)
the licensee has provided to the consumer an opt out notice as
required in Section 8 of this Regulation;
(c)
the licensee has given the consumer a reasonable opportunity,
before it discloses the information to the nonaffiliated third party,
to opt out of the disclosure; and
(d)
the consumer does not opt out.
(2)
Opt out definition. Opt out means a direction by the consumer that the
licensee not disclose nonpublic personal financial information about that
consumer to a nonaffiliated third party, other than as permitted by Sections
14, 15 and 16 of this Regulation.
28
(3)
Examples of reasonable opportunity to opt out. A licensee provides a
consumer with a reasonable opportunity to opt out if:
(a)
By mail. The licensee mails the notices required in Section
11(A)(1) above to the consumer and allows the consumer to opt
out by mailing a form, calling a toll-free telephone number or any
other reasonable means within thirty (30) days from the date the
licensee mailed the notices.
(b)
By electronic means. A customer opens an on-line account with a
licensee and agrees to receive the notices required in Section
11(A)(1) above electronically, and the licensee allows the
customer to opt out by any reasonable means within thirty (30)
days after the date that the customer acknowledges receipt of the
notices in conjunction with opening the account.
(c)
Isolated transaction with consumer. For an isolated transaction
such as providing the consumer with an insurance quote, a licensee
provides the consumer with a reasonable opportunity to opt out if
the licensee provides the notices required in Section 11(A)(1)
above at the time of the transaction and requests that the consumer
decide, as a necessary part of the transaction, whether to opt out
before completing the transaction.
B.
Application of opt out to all consumers and all nonpublic personal financial
information.
(1)
A licensee shall comply with this section, regardless of whether the
licensee and the consumer have established a customer relationship.
(2)
Unless a licensee complies with this section, the licensee may not, directly
or through any affiliate, disclose any nonpublic personal financial
information about a consumer that the licensee has collected, regardless of
whether the licensee collected it before or after receiving the direction to
opt out from the consumer.
C.
Partial opt out. A licensee may allow a consumer to select certain nonpublic
personal financial information or certain nonaffiliated third parties with respect to
which the consumer wishes to opt out.
Section 12.
Limits on Redisclosure and Reuse of Nonpublic Personal Financial
Information
A.
(1)
Information the licensee receives under an exception. If a licensee receives
nonpublic personal financial information from a nonaffiliated financial
29
institution under an exception in Sections 15 or 16 of this Regulation, the
licensee’s disclosure and use of that information is limited as follows:
(a)
the licensee may disclose the information to the affiliates of the
financial institution from which the licensee received the
information;
(b)
the licensee may disclose the information to its affiliates, but the
licensee’s affiliates may, in turn, disclose and use the information
only to the extent that the licensee may disclose and use the
information; and
(c)
the licensee may disclose and use the information pursuant to an
exception in Sections 15 or 16 of this Regulation, in the ordinary
course of business to carry out the activity covered by the
exception under which the licensee received the information.
(2)
Example. If a licensee receives information from a nonaffiliated financial
institution for claims settlement purposes, the licensee may disclose the
information for fraud prevention, or in response to a properly authorized
subpoena. The licensee may not disclose that information to a third party
for marketing purposes or use that information for its own marketing
purposes.
B.
(1)
Information a licensee receives outside of an exception. If a licensee
receives nonpublic personal financial information from a nonaffiliated
financial institution other than under an exception in Section 15 or 16 of
this Regulation, the licensee may disclose the information only:
(a)
to the affiliates of the financial institution from which the licensee
received the information;
(b)
to its affiliates, but its affiliates may, in turn, disclose the
information only to the extent that the licensee may disclose the
information; and
(c)
to any other person, if the disclosure would be lawful if made
directly to that person by the financial institution from which the
licensee received the information.
(2)
Example. If a licensee obtains a customer list from a nonaffiliated
financial institution outside of the exceptions in Section 15 or 16 of this
Regulation:
(a)
the licensee may use that list for its own purposes; and
30
(b)
the licensee may disclose that list to another nonaffiliated third
party only if the financial institution from which the licensee
purchased the list could have lawfully disclosed the list to that
third party. That is, the licensee may disclose the list in accordance
with the privacy policy of the financial institution from which the
licensee received the list, as limited by the opt out direction of each
consumer whose nonpublic personal financial information the
licensee intends to disclose, and the licensee may disclose the list
in accordance with an exception in Section 15 or 16 of this
Regulation, such as to the licensee’s attorneys or accountants.
C.
Information a licensee discloses under an exception. If a licensee discloses
nonpublic personal financial information to a nonaffiliated third party under an
exception in Sections 15 or 16 of this Regulation, the third party may disclose and
use that information only as follows:
(1)
the third party may disclose the information to the licensee’s affiliates;
(2)
the third party may disclose the information to its affiliates, but its
affiliates may, in turn, disclose and use the information only to the extent
that the third party may disclose and use the information; and
(3)
the third party may disclose and use the information pursuant to an
exception in Section 15 or 16 of this Regulation in the ordinary course of
business to carry out the activity covered by the exception under which it
received the information.
D.
Information a licensee discloses outside of an exception. If a licensee discloses
nonpublic personal financial information to a nonaffiliated third party other than
under an exception in Section 15 or 16 of this Regulation, the third party may
disclose the information only:
(1)
to the licensee’s affiliates;
(2)
to the third party's affiliates, but the third party's affiliates, in turn, may
disclose the information only to the extent the third party can disclose the
information; and
(3)
to any other person, if the disclosure would be lawful if the licensee made
it directly to that person.
Section 13.
Limits on Sharing Account Number Information for Marketing Purposes
A.
General prohibition on disclosure of account numbers. A licensee shall not,
directly or through an affiliate, disclose, other than to a consumer reporting
agency, a policy number or similar form of access number or access code for a
31
consumer’s policy or transaction account to any nonaffiliated third party for use in
telemarketing, direct mail marketing or other marketing through electronic mail to
the consumer.
B.
Exceptions. Section 13(A) above does not apply if a licensee discloses a policy
number or similar form of access number or access code:
(1)
to the licensee’s service provider solely in order to perform marketing for
the licensee’s own products or services, as long as the service provider is
not authorized to directly initiate charges to the account;
(2)
to a licensee who is a producer solely in order to perform marketing for
the licensee’s own products or services; or
(3)
to a participant in an affinity or similar program where the participants in
the program are identified to the customer when the customer enters into
the program.
C.
Examples.
(1)
Policy number. A policy number, or similar form of access number or
access code, does not include a number or code in an encrypted form, as
long as the licensee does not provide the recipient with a means to decode
the number or code.
(2)
Policy or transaction account. For the purposes of this section, a policy or
transaction account is an account other than a deposit account or a credit
card account. A policy or transaction account does not include an account
to which third parties cannot initiate charges.
Section 14.
Exception to Opt Out Requirements for Disclosure of Nonpublic Personal
Financial Information for Service Providers and Joint Marketing
A.
General rule.
(1)
The opt out requirements in Sections 8 and 11 of this Regulation do not
apply when a licensee provides nonpublic personal financial information
to a nonaffiliated third party to perform services for the licensee or
functions on the licensee’s behalf, if the licensee:
(a)
provides the initial notice in accordance with Section 5 of this
Regulation; and
(b)
enters into a contractual agreement with the third party that
prohibits the third party from disclosing or using the information
other than to carry out the purposes for which the licensee
32
disclosed the information, including use under an exception in
Section 15 or 16 of this Regulation in the ordinary course of
business to carry out those purposes.
(2)
Example. If a licensee discloses nonpublic personal financial information
under this section to a financial institution with which the licensee
performs joint marketing, the licensee’s contractual agreement with that
institution meets the requirements of Section 14(A)(1)(b) above if it
prohibits the institution from disclosing or using the nonpublic personal
financial information except as necessary to carry out the joint marketing
or under an exception in Section 15 or 16 of this Regulation in the
ordinary course of business to carry out that joint marketing.
B.
Service may include joint marketing. The services a nonaffiliated third party
performs for a licensee under Section 14(A) above may include marketing of the
licensee’s own products or services or marketing of financial products or services
offered pursuant to joint agreements between the licensee and one or more
financial institutions.
C.
Definition of “joint agreement.” For purposes of this section, “joint agreement”
means a written contract pursuant to which a licensee and one or more financial
institutions jointly offer, endorse or sponsor a financial product or service.
Section 15.
Exceptions to Notice and Opt Out Requirements for Disclosure of Nonpublic
Personal Financial Information for Processing and Servicing Transactions
A.
Exceptions for processing transactions at consumer’s request. The requirements
for initial notice in Section 5(A)(2), the opt out in Sections 8 and 11, and service
providers and joint marketing in Section 14 do not apply if the licensee discloses
nonpublic personal financial information as necessary to effect, administer or
enforce a transaction that a consumer requests or authorizes, or in connection
with:
(1)
servicing or processing an insurance product or service that a consumer
requests or authorizes;
(2)
maintaining or servicing the consumer’s account with a licensee, or with
another entity as part of a private label credit card program or other
extension of credit on behalf of such entity;
(3)
a proposed or actual securitization, secondary market sale (including sales
of servicing rights) or similar transaction related to a transaction of the
consumer; or
(4)
reinsurance or stop loss or excess loss insurance.
33
B.
“Necessary to effect, administer or enforce a transaction” means that the
disclosure is:
(1)
Required, or is one of the lawful or appropriate methods, to enforce the
licensee’s rights or the rights of other persons engaged in carrying out the
financial transaction or providing the product or service; or
(2)
Required, or is a usual, appropriate or acceptable method:
(a)
to carry out the transaction or the product or service business of
which the transaction is a part, and record, service or maintain the
consumer’s account in the ordinary course of providing the
insurance product or service;
(b)
to administer or service benefits or claims relating to the
transaction or the product or service business of which it is a part;
(c)
to provide a confirmation, statement or other record of the
transaction, or information on the status or value of the insurance
product or service to the consumer or the consumer’s agent or
broker;
(d)
to accrue or recognize incentives or bonuses associated with the
transaction that are provided by a licensee or any other party;
(e)
to underwrite insurance at the consumer’s request or for any of the
following purposes as they relate to a consumer’s insurance:
account administration, reporting, investigating or preventing fraud
or material misrepresentation, processing premium payments,
processing insurance claims, administering insurance benefits
(including utilization review activities), participating in research
projects or as otherwise required or specifically permitted by
federal or state law; or
(f)
in connection with:
(i)
the authorization, settlement, billing, processing, clearing,
transferring, reconciling or collection of amounts charged,
debited or otherwise paid using a debit, credit or other
payment card, check or account number, or by other
payment means;
(ii)
the transfer of receivables, accounts or interests therein; or
(iii)
the audit of debit, credit or other payment information.
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Section 16.
Other Exceptions to Notice and Opt Out Requirements for Disclosure of
Nonpublic Personal Financial Information
A.
Exceptions to opt out requirements. The requirements for initial notice to
consumers in Section 5(A)(2), the opt out in Sections 8 and 11, and service
providers and joint marketing in Section 14 do not apply when a licensee
discloses nonpublic personal financial information:
(1)
with the consent or at the direction of the consumer, provided that the
consumer has not revoked the consent or direction;
(2)
(a)
to protect the confidentiality or security of a licensee’s records
pertaining to the consumer, service, product or transaction;
(b)
to protect against or prevent actual or potential fraud or
unauthorized transactions;
(c)
for required institutional risk control or for resolving consumer
disputes or inquiries;
(d)
to persons holding a legal or beneficial interest relating to the
consumer; or
(e)
to persons acting in a fiduciary or representative capacity on behalf
of the consumer;
(3)
to provide information to insurance rate advisory organizations, guaranty
funds or agencies, agencies that are rating a licensee, persons that are
assessing the licensee’s compliance with industry standards, and the
licensee’s attorneys, accountants and auditors;
(4)
to the extent specifically permitted or required under other provisions of
law and in accordance with the federal Right to Financial Privacy Act of
1978 (12 U.S.C. §§ 3401 et seq.), to law enforcement agencies (including
the Federal Reserve Board, Office of the Comptroller of the Currency,
Federal Deposit Insurance Corporation, Office of Thrift Supervision,
National Credit Union Administration, the Securities and Exchange
Commission, the Secretary of the Treasury, with respect to 31 U.S.C. §§
5311 et seq. [Records and Reports on Monetary Instruments and
Transactions] and 12 U.S.C. §§ 1951 et seq. [Financial Recordkeeping], a
state insurance authority, and the Federal Trade Commission), self-
regulatory organizations or for an investigation on a matter related to
public safety;
35
(5)
(a)
to a consumer reporting agency in accordance with the federal Fair
Credit Reporting Act (15 U.S.C. §§ 1681 et seq.) and the fair credit
laws of this state; or
(b)
from a consumer report reported by a consumer reporting agency;
(6)
in connection with a proposed or actual sale, merger, transfer or exchange
of all or a portion of a business or operating unit if the disclosure of
nonpublic personal financial information concerns solely consumers of the
business or unit;
(7)
(a)
to comply with federal, state or local laws, rules and other
applicable legal requirements;
(b)
to comply with a properly authorized civil, criminal or regulatory
investigation, or subpoena or summons by federal, state or local
authorities; or
(c)
to respond to judicial process or government regulatory authorities
having jurisdiction over a licensee for examination, compliance or
other purposes as authorized by law; or
(8)
for purposes related to the replacement of a group benefit plan, a group
health plan or a group welfare plan.
B.
Example of revocation of consent. A consumer may revoke consent by
subsequently exercising the right to opt out of future disclosures of nonpublic
personal financial information as permitted under Section 8(F).
Section 17.
Protection of Fair Credit Reporting Act
Nothing in this Regulation shall be construed to modify, limit or supersede the operation of the
federal Fair Credit Reporting Act (15 U.S.C. §§ 1681 et seq.), and no inference shall be drawn on
the basis of the provisions of this Regulation regarding whether information is transaction or
experience information under 15 U.S.C. § 1681a.
Section 18.
Nondiscrimination
A licensee shall not unfairly discriminate against any consumer or customer because that
consumer or customer has opted out from the disclosure of his or her nonpublic personal
financial information pursuant to the provisions of this Regulation.
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Section 19.
Violation
No licensee shall violate the provisions of this Regulation. The insurance regulatory authorities
of this State are authorized to investigate any alleged violations of this Regulation and to impose
fines and other sanctions as lawfully determined to be appropriate in accordance with the
applicable laws of this State.
Section 20.
Severability
If any section or portion of a section of this Regulation or its applicability to any person or
circumstance is held invalid by a court, the remainder of the Regulation or the applicability of
the provision to other persons or circumstances shall not be affected.
Section 21.
Effective Date
A.
Effective Date. This Regulation is effective July 1, 2001 pursuant to Emergency
Insurance Regulation Number 96 effective November 6, 2000.
B.
(1)
Notice requirement for consumers who are the licensee’s customers on the
compliance date. By July 1, 2001, a licensee shall provide an initial notice,
as required by Section 5 of this Regulation, to consumers who are the
licensee’s customers on July 1, 2001.
(2)
Example. A licensee provides an initial notice to consumers who are its
customers on July 1, 2001, if, by that date, the licensee has established a
system for providing an initial notice to all new customers and has mailed
the initial notice to all the licensee’s existing customers.
C.
Two-year grandfathering of service agreements. Until July 1, 2002, a contract that
a licensee has entered into with a nonaffiliated third party to perform services for
the licensee or functions on the licensee’s behalf satisfies the provisions of
Section 14(A)(1)(b) of this Regulation, even if the contract does not include a
requirement that the third party maintain the confidentiality of nonpublic personal
financial information, as long as the licensee entered into the agreement on or
before July 1, 2000.
EFFECTIVE DATE:
July 1, 2001
REFILED:
December 19, 2001
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APPENDIX A – SAMPLE CLAUSES
Licensees, including a group of financial holding company affiliates that use a common privacy
notice, may use the following sample clauses, if the clause is accurate for each institution that
uses the notice. (Note that disclosure of certain information, such as assets, income and
information from a consumer reporting agency, may give rise to obligations under the federal
Fair Credit Reporting Act, such as a requirement to permit a consumer to opt out of disclosures
to affiliates or designation as a consumer reporting agency if disclosures are made to
nonaffiliated third parties.)
A-1–Categories of information a licensee collects (all institutions)
A licensee may use this clause, as applicable, to meet the requirement of Section 7(A)(1) to
describe the categories of nonpublic personal financial information the licensee collects.
Sample Clause A-1:
We collect nonpublic personal financial information about you from the following sources:
•
Information we receive from you on applications or other forms;
•
Information about your transactions with us, our affiliates or others; and
•
Information we receive from a consumer reporting agency.
A-2–Categories of information a licensee discloses (institutions that disclose outside of the
exceptions)
A licensee may use one of these clauses, as applicable, to meet the requirement of Section
7(A)(2) to describe the categories of nonpublic personal financial information the licensee
discloses. The licensee may use these clauses if it discloses nonpublic personal financial
information other than as permitted by the exceptions in Sections 14, 15 and 16.
Sample Clause A-2, Alternative 1:
We may disclose the following kinds of nonpublic personal financial information about you:
•
Information we receive from you on applications or other forms, such as [provide illustrative
examples, such as “your name, address, social security number, assets, income, and
beneficiaries”];
•
Information about your transactions with us, our affiliates or others, such as [provide
illustrative examples, such as “your policy coverage, premiums, and payment history”]; and
•
Information we receive from a consumer reporting agency, such as [provide illustrative
examples, such as “your creditworthiness and credit history”].
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Sample Clause A-2, Alternative 2:
We may disclose all of the information that we collect, as described [describe location in the
notice, such as “above” or “below”].
A-3–Categories of information a licensee discloses and parties to whom the licensee
discloses (institutions that do not disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirements of Sections 7(A)(2), (3),
and (4) to describe the categories of nonpublic personal financial information about customers
and former customers that the licensee discloses and the categories of affiliates and nonaffiliated
third parties to whom the licensee discloses. A licensee may use this clause if the licensee does
not disclose nonpublic personal financial information to any party, other than as permitted by the
exceptions in Sections 15 and 16.
Sample Clause A-3:
We do not disclose any nonpublic personal financial information about our customers or former
customers to anyone, except as permitted by law.
A-4–Categories of parties to whom a licensee discloses (institutions that disclose outside of
the exceptions)
A licensee may use this clause, as applicable, to meet the requirement of Section 7(A)(3) to
describe the categories of affiliates and nonaffiliated third parties to whom the licensee discloses
nonpublic personal financial information. This clause may be used if the licensee discloses
nonpublic personal financial information other than as permitted by the exceptions in Sections
14, 15 and 16, as well as when permitted by the exceptions in Sections 15 and 16.
Sample Clause A-4:
We may disclose nonpublic personal financial information about you to the following types of
third parties:
•
Financial service providers, such as [provide illustrative examples, such as “life insurers,
automobile insurers, mortgage bankers, securities broker-dealers, and insurance agents”];
•
Non-financial companies, such as [provide illustrative examples, such as “retailers, direct
marketers, airlines, and publishers”]; and
•
Others, such as [provide illustrative examples, such as “non-profit organizations”].
We may also disclose nonpublic personal financial information about you to nonaffiliated third
parties as permitted by law.
A-5–Service provider/joint marketing exception
A licensee may use one of these clauses, as applicable, to meet the requirements of Section
7(A)(5) related to the exception for service providers and joint marketers in Section 14. If a
39
licensee discloses nonpublic personal financial information under this exception, the licensee
shall describe the categories of nonpublic personal financial information the licensee discloses
and the categories of third parties with which the licensee has contracted.
Sample Clause A-5, Alternative 1:
We may disclose the following information to companies that perform marketing services on our
behalf or to other financial institutions with which we have joint marketing agreements:
•
Information we receive from you on applications or other forms, such as [provide illustrative
examples, such as “your name, address, social security number, assets, income, and
beneficiaries”];
•
Information about your transactions with us, our affiliates or others, such as [provide
illustrative examples, such as “your policy coverage, premium, and payment history”]; and
•
Information we receive from a consumer reporting agency, such as [provide illustrative
examples, such as “your creditworthiness and credit history”].
Sample Clause A-5, Alternative 2:
We may disclose all of the information we collect, as described [describe location in the notice,
such as “above” or “below”] to companies that perform marketing services on our behalf or to
other financial institutions with whom we have joint marketing agreements.
A-6–Explanation of opt out right (institutions that disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirement of Section 7(A)(6) to
provide an explanation of the consumer’s right to opt out of the disclosure of nonpublic personal
financial information to nonaffiliated third parties, including the method(s) by which the
consumer may exercise that right. The licensee may use this clause if the licensee discloses
nonpublic personal financial information other than as permitted by the exceptions in Sections
14, 15 and 16.
Sample Clause A-6:
If you prefer that we not disclose nonpublic personal financial information about you to
nonaffiliated third parties, you may opt out of those disclosures, that is, you may direct us not to
make those disclosures (other than disclosures permitted by law). If you wish to opt out of
disclosures to nonaffiliated third parties, you may [describe a reasonable means of opting out,
such as “call the following toll-free number: (insert number)].
A-7–Confidentiality and security (all institutions)
A licensee may use this clause, as applicable, to meet the requirement of Section 7(A)(8) to
describe its policies and practices with respect to protecting the confidentiality and security of
nonpublic personal financial information.
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Sample Clause A-7:
We restrict access to nonpublic personal financial information about you to [provide an
appropriate description, such as “those employees who need to know that information to provide
products or services to you”]. We maintain physical, electronic, and procedural safeguards that
comply with federal regulations to guard your nonpublic personal financial information.
________________________________________________