Current through Register Vol. 46, No. 12, March 20, 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.
