Current through Register Vol. 46, No. 39, September 25, 2024
(a) Initial notice requirement. A licensee
shall provide a clear and conspicuous notice that accurately reflects the
licensee's privacy policies and practices to:
(1) customer--an individual who becomes a
licensee's customer, not later than when the licensee establishes a customer
relationship, except as provided in subdivision (e) of this section;
and
(2) consumer--a consumer,
before a licensee discloses any nonpublic personal financial information about
the consumer to any nonaffiliated third party, if a licensee makes such a
disclosure other than as authorized by sections 420.14 and
420.15 of this Part.
(b) When initial notice to a
consumer is not required. A licensee is not required to provide an initial
notice to a consumer under paragraph (a)(2) of this section 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 420.14 and
420.15 of this Part 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 a licensee establishes a customer relationship.
(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:
(i)
becomes a policyholder of a licensee that is an insurer. This occurs when the
insurer delivers an insurance policy or contract to the customer;
(ii) in the case of a licensee that is an
insurance agent or insurance broker, obtains insurance through that licensee;
or
(iii) 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 subdivision (a) of this
section as follows:
(1) the licensee shall
provide a revised policy notice, under section
420.8 of this Part, that covers
the customer's new insurance product or service and that clearly states whether
any existing opt-out direction applies to the new 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, a licensee does
not need to provide a new privacy notice under subdivision (a) of this
section.
(e) Exceptions
to allow subsequent delivery of notice.
(1) A
licensee may provide the initial notice required by paragraph (a)(1) of this
section within a reasonable time after the licensee establishes a customer
relationship if:
(i) establishing the
customer relationship is not at the customer's election; or
(ii) providing notice not later than when the
licensee establishes the 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.
(i) 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 institution
or residual market mechanism and the customer does not have a choice about the
licensee's acquisition or assignment.
(ii) 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.
(iii) 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
420.9 of this Part. If the
licensee uses a short-form initial notice for noncustomers according to section
420.6(c) of this
Part, the licensee may deliver its privacy notice according to section
420.6(c)(3) of
this Part.
