Under Pennsylvania's privacy regulations for consumer financial information, what must an insurer generally do before disclosing a customer's nonpublic personal financial information to a nonaffiliated third party?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Pennsylvania's privacy framework, grounded in 40 P.S. § 310.77(a) and implemented through 31 Pa. Code Ch. 146a, requires insurers and producers to provide customers with notice of their privacy practices and, before disclosing nonpublic personal financial information to nonaffiliated third parties, to give the customer an opportunity to opt out where the rules require it. The notice-and-opt-out structure lets the customer, not the regulator and not the newspaper, control the disclosure. Failure to provide the required notice and opt-out is a violation the Pennsylvania Insurance Department can enforce.
Why the other options are wrong
- A) The regime delegates the choice to the customer through notice and opt-out; it does not require departmental pre-approval of each disclosure.
- C) Newspaper publication is not a substitute for the direct customer notice and opt-out that the privacy regulations require.
- D) The rules do not bar all non-insurer disclosure; they condition disclosure on notice and the customer's opt-out rights.
Memory hook
Tell the customer, let them opt out: Pennsylvania privacy runs on notice, not permission slips.