State RegulationsNC specificDifficulty 2/5
An insurer collects detailed personal and health information while underwriting an application in North Carolina. What does the Insurance Information and Privacy Protection Act (G.S. 58-39-5 through 58-39-120) require of the insurer?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
North Carolina's Insurance Information and Privacy Protection Act, Article 39 of Chapter 58 (G.S. 58-39-5 through 58-39-120), governs the collection, use, and disclosure of personal information gathered in connection with insurance transactions. It restricts disclosure absent proper authorization, gives individuals rights of access and correction regarding their own information, and imposes duties on insurers and producers that handle such data.
Why the other options are wrong
- A) Article 39 restricts the disposition of personal information; G.S. 58-39-5 and its following sections exist to prevent the free sale of consumer data.
- B) Sharing personal information with nonaffiliated marketers without proper authorization is precisely what G.S. 58-39-5 through 58-39-120 are designed to curtail.
- D) No 30-day destruction rule appears in Article 39; the Act regulates collection, use, and disclosure rather than mandating rapid destruction of records.
Memory hook
Article 39: collect less, disclose carefully, respect the consumer's rights.