Consumer Financial Information
Federal law designates the DOI as the agency to set up procedures and establish rules to protect the consumer financial information with respect to insurance sales.
The DOI’s regulations requires all of licenses:
- That consumer must be given notice about the privacy practices and the policies.
- They describe when information may be released.
- They provide methods to prevent disclosure of information.
Note: These regulations apply only on personal lines insurance.
Notices
Initial Privacy Policy Notices must be made:
No later than the time at which the customer relationship begins, and before any information is released to a third party.
Annual Notices must be given as long as a customer relationship is maintained.
Notices must contain:
- The type of private information collected
- The types that the licensee discloses
- The parties to which information is disclosed
- Whom those parties disclose information to
- The consumer’s right to opt out of any disclosure to nonaffiliated third parties
- The consumer’s rights under the Fair Credit Act regarding disclosure
- The licensees’ policies regarding the security of private information.
Note: If policies and procedures are revised, newly prepared Revised Notices must be sent. All Notices may be made electronically if the consumer agrees. The notice may be sent independently or with a billing or other communication.
Opting Out –When a consumer “opts out” restrictions apply to third parties necessary to service the insurance product or account. The restrictions also do not apply in the normal course of business, such as below:
- Credit reports
- Responding to subpoenas and other legal process
- Complying with anti-insurance fraud measures
- Replacement of group life and health plans
- Aiding auditors or examiner
Violations – Failure to comply with the statute is a violation of the Unfair Trade Practices Act.
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