State RegulationsNC specificDifficulty 2/5
While underwriting an accident and health application, a North Carolina insurer collects detailed personal information about the applicant. Under the Insurance Information and Privacy Protection Act, what obligation does the insurer have regarding that information?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The Insurance Information and Privacy Protection Act, Article 39 of Chapter 58 (G.S. 58-39-5 through 58-39-120), governs how insurers collect, use, and disclose personal information. It imposes standards for information practices and gives individuals rights to learn what is on file, access the recorded information, and correct or dispute it — a privacy framework that applies to accident and health underwriting as much as to any other line.
Why the other options are wrong
- A) The Act exists to prevent exactly this: unrestricted disclosure of personal information to outside parties is not permitted once collected under its standards.
- C) The Act prescribes access, correction, and disclosure rules, not a mandatory 30-day file destruction regime.
- D) The Act regulates insurer information practices directly; it does not require prior Commissioner approval for the ordinary recording of underwriting information.
Memory hook
Article 39: collect by the rules, disclose by the rules, let them see and fix their file.