California's insurance privacy rules require insurers and agents to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California's insurance privacy rules, including the Insurance Information and Privacy Protection Act and related federal rules, require insurers and agents to protect the confidentiality of nonpublic personal information collected in insurance transactions. Personal and medical information may be disclosed only in defined circumstances, typically with the consumer's consent, as required by law, or for legitimate business functions such as underwriting or claims. Unauthorized sharing of client information with marketers, publishing it in public reports, or disclosing medical information to employers without authorization violates these protections. The duty reflects the sensitivity of the financial and medical data that consumers entrust to the insurance industry.
Why the other options are wrong
- B) Personal information may not be shared freely with marketers. Disclosure is limited to specified circumstances such as consent, legal compulsion, or defined business needs, and marketing use without authorization violates the privacy rules.
- C) Client information is not published in annual public reports; confidentiality is the rule. The privacy framework protects nonpublic personal information from public disclosure rather than requiring or permitting it.
- D) Medical information may not be disclosed to employers without proper authorization. Medical records are among the most sensitive categories of protected information and are disclosed only under narrow, permitted circumstances.
Memory hook
Client facts stay private unless the law or consent says otherwise.