(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 subsection
(e).
(2)
Consumer
. A consumer, before the licensee discloses nonpublic personal financial
information about the consumer to any nonaffiliated third party, if the
licensee makes a disclosure other than as authorized by §§
146a.32 and
146a.33 (relating to exceptions to
notice and opt out requirements for disclosure of nonpublic personal financial
information for processing and servicing transactions; and other exceptions to
notice and opt out requirements for disclosure of nonpublic personal financial
information).
(b)
When initial notice to a consumer is not required. A licensee
is not required to provide an initial notice to a consumer under subsection
(a)(2) if either:
(1) The licensee does not
disclose any nonpublic personal financial information about the consumer to any
nonaffiliated third party, other than as authorized by §§
146a.32 and
146a.33, and the licensee does not
have a customer relationship with the consumer.
(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.
(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 either:
(i) 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.
(ii) 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 subsection (a) in either
of the following ways:
(1) The licensee may
provide a revised policy notice, under §
146a.15 (relating to revised
privacy notices), that covers the customer's new insurance product or
service.
(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 subsection
(a).
(e)
Exceptions to allow subsequent delivery of notice.
(1) A licensee may provide the initial notice
required by subsection (a)(1) within a reasonable time after the licensee
establishes a customer relationship if either of the following conditions is
met:
(i) Establishing the customer
relationship is not at the customer's election.
(ii) 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 are as follows:
(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 financial 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 website.
(f)
Delivery. When a
licensee is required to deliver an initial privacy notice by this section, the
licensee shall deliver it according to §
146a.16 (relating to delivery). If
the licensee uses a short-form initial notice for noncustomers according to
§
146a.13(d)
(relating to information to be included in privacy notices), the licensee may
deliver its privacy notice according to §
146a.13(d)(3).
