18 Del. Admin. Code § 904-2.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 904-2.0 - Privacy and Opt out Notices for Financial Information

2.1 Initial Privacy Notice to Consumers Required

2.1.1 Initial notice requirement. A licensee shall provide a clear and conspicuous notice that accurately reflects its privacy policies and practices to:

2.1.1.1 Customer. An individual who becomes the licensee's customer, not later than when the licensee establishes a customer relationship, except as provided in subsection 2.1.5 of this regulation; and

2.1.1.2 Consumer. A consumer, before the licensee discloses any nonpublic personal financial information about the consumer to any nonaffiliated third party, if the licensee makes a disclosure other than as authorized by Sections 10.0 and 11.0 of this regulation.

2.1.2 When initial notice to a consumer is not required. A licensee is not required to provide an initial notice to a consumer under section 2.1.1 of this section if:

2.1.2.1 The licensee does not disclose any nonpublic personal financial information about the consumer to any nonaffiliated third party, other than as authorized by Sections 10.0 and 11.0 of this regulation, and the licensee does not have a customer relationship with the consumer; or

2.1.2.2 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.

2.1.3 When the licensee establishes a customer relationship.

2.1.3.1 General rule. A licensee establishes a customer relationship at the time the licensee and the consumer enter into a continuing relationship.

2.1.3.2 Examples of establishing customer relationship. A licensee establishes a customer relationship when the consumer:

2.1.3.2.1 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; or

2.1.3.2.2 Agrees to obtain financial, economic or investment advisory services relating to insurance products or services for a fee from the licensee.

2.1.4 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 2.1.1 of this regulation as follows:

2.1.4.1 The licensee may provide a revised policy notice, under Section 4.0 of this regulation, that covers the customer's new insurance product or service; or

2.1.4.2 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 2.1.1 of this regulation.

2.1.5 Exceptions to allow subsequent delivery of notice.

2.1.5.1 A licensee may provide the initial notice required by subsection 2.1.1.1 of this regulation within a reasonable time after the licensee establishes a customer relationship if:

2.1.5.1.1 Establishing the customer relationship is not at the customer's election; or

2.1.5.1.2 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.

2.1.5.2 Examples of exceptions.

2.1.5.2.1 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.

2.1.5.2.2 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.

2.1.5.3 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 web site.

2.1.6 Delivery. When a licensee is required to deliver an initial privacy notice by this section, the licensee shall deliver it according to Section 5.0 of this regulation. If the licensee uses a short-form initial notice for non-customers according to subsection 2.4 of this regulation, the licensee may deliver its privacy notice according to subsection 2.4.3 of this regulation.

2.2 Annual Privacy Notice to Customers Required

2.2.1 General rule. A licensee shall provide a clear and conspicuous notice to customers that accurately reflects its privacy policies and practices not less than annually during the continuation of the customer relationship. Annually means at least once in any period of twelve (12) consecutive months during which that relationship exists. A licensee may define the twelve-consecutive-month period, but the licensee shall apply it to the customer on a consistent basis.

2.2.1.1 Example. A licensee provides a notice annually if it defines the twelve-consecutive-month period as a calendar year and provides the annual notice to the customer once in each calendar year following the calendar year in which the licensee provided the initial notice. For example, if a customer opens an account on any day of year 1, the licensee shall provide an annual notice to that customer by December 31 of year 2.

2.2.1.2 Exception to General Rule. A licensee is not required to provide an annual notice under this subsection if the licensee is subject to the federal Gramm-Leach-Bliley Act as amended by the Fixing America's Surface Transportation Act, (P.L. 114-94, section 75001) provided that the licensee:

2.2.1.2.1 Provides nonpublic personal information to nonaffiliated third parties only in accordance with Sections 9.0, 10.0 and 11.0 of this regulation; and

2.2.1.2.2 Has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent notice sent to consumers in accordance with this subsection or with subsection 2.1 of this regulation.

2.2.2 Termination of customer relationship. A licensee is not required to provide an annual notice to a former customer. A former customer is an individual with whom a licensee no longer has a continuing relationship.

2.2.3 When a licensee is required by this section to deliver an annual privacy notice, the licensee shall deliver it according to Section 5.0 of this regulation.

2.3 Information to be Included in Privacy Notices

2.3.1 General rule. The initial, annual and revised privacy notices that a licensee provides under subsections 2.1 and 2.2 and Section 4.0 of this regulation shall include each of the following items of information, in addition to any other information the licensee wishes to provide, that applies to the licensee and to the consumers to whom the licensee sends its privacy notice:

2.3.1.1 The categories of nonpublic personal financial information that the licensee collects;

2.3.1.2 The categories of nonpublic personal financial information that the licensee discloses;

2.3.1.3 The categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information, other than those parties to whom the licensee discloses information under Sections 10.0 and 11.0 of this regulation;

2.3.1.4 The categories of nonpublic personal financial information about the licensee's former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information about the licensee's former customers, other than those parties to whom the licensee discloses information under Sections 10.0 and 11.0 of this regulation;

2.3.1.5 If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under Section 9.0 (and no other exception in Sections 10.0 and 11.0 of this regulation applies to that disclosure), a separate description of the categories of information the licensee discloses and the categories of third parties with whom the licensee has contracted;

2.3.1.6 An explanation of the consumer's right under subsections 6.1 through 6.3 of this regulation to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the methods by which the consumer may exercise that right at that time;

2.3.1.7 Any disclosures that the licensee makes under Section 603(d)(2)(A)(iii) of the federal Fair Credit Reporting Act (15 U.S.C. 1681 a(d)(2)(A)(iii)) (that is, notices regarding the ability to opt out of disclosures of information among affiliates);

2.3.1.8 The licensee's policies and practices with respect to protecting the confidentiality and security of nonpublic personal information; and

2.3.1.9 Any disclosure that the licensee makes under subsection 2.3.2 of this regulation.

2.3.2 Description of parties subject to exceptions. If a licensee discloses nonpublic personal financial information as authorized under Sections 10.0 and 11.0 of this regulation, the licensee is not required to list those exceptions in the initial or annual privacy notices required by subsections 2.1 and 2.2 of this regulation. When describing the categories of parties to whom disclosure is made, the licensee is required to state only that it makes disclosures to other affiliated or nonaffiliated third parties, as applicable, as permitted by law.

2.3.3 Examples.

2.3.3.1 Categories of nonpublic personal financial information that the licensee collects. A licensee satisfies the requirement to categorize the nonpublic personal financial information it collects if the licensee categorizes it according to the source of the information, as applicable:

2.3.3.1.1 Information from the consumer;

2.3.3.1.2 Information about the consumer's transactions with the licensee or its affiliates;

2.3.3.1.3 Information about the consumer's transactions with nonaffiliated third parties; and

2.3.3.1.4 Information from a consumer reporting agency.

2.3.3.2 Categories of nonpublic personal financial information a licensee discloses.

2.3.3.2.1 A licensee satisfies the requirement to categorize nonpublic personal financial information it discloses if the licensee categorizes the information according to source, as described in subsection 2.3.3.1 of this regulation, as applicable, and provides a few examples to illustrate the types of information in each category. These might include:

2.3.3.2.1.1 Information from the consumer, including application information, such as assets and income and identifying information, such as name, address and social security number;

2.3.3.2.1.2 Transaction information, such as information about balances, payment history and parties to the transaction; and

2.3.3.2.1.3 Information from consumer reports, such as a consumer's creditworthiness and credit history.

2.3.3.2.2 A licensee does not adequately categorize the information that it discloses if the licensee uses only general terms, such as transaction information about the consumer.

2.3.3.2.3 If a licensee reserves the right to disclose all of the nonpublic personal financial information about consumers that it collects, the licensee may simply state that fact without describing the categories or examples of nonpublic personal information that the licensee discloses.

2.3.3.3 Categories of affiliates and nonaffiliated third parties to whom the licensee discloses.

2.3.3.3.1 A licensee satisfies the requirement to categorize the affiliates and nonaffiliated third parties to which the licensee discloses nonpublic personal financial information about consumers if the licensee identifies the types of businesses in which they engage.

2.3.3.3.2 Types of businesses may be described by general terms only if the licensee uses a few illustrative examples of significant lines of business. For example, a licensee may use the term financial products or services if it includes appropriate examples of significant lines of businesses, such as life insurer, automobile insurer, consumer banking or securities brokerage.

2.3.3.3.3 A licensee also may categorize the affiliates and nonaffiliated third parties to which it discloses nonpublic personal financial information about consumers using more detailed categories.

2.3.3.3.4 Disclosures under exception for service providers and joint marketers. If a licensee discloses nonpublic personal financial information under the exception in Section 9.0 to a nonaffiliated third party to market products or services that it offers alone or jointly with another financial institution, the licensee satisfies the disclosure requirement of subsection 2.3.1.5 of this regulation if it:

2.3.3.3.4.1 Lists the categories of nonpublic personal financial information it discloses, using the same categories and examples the licensee used to meet the requirements of subsection 2.3.1.2 of this regulation, as applicable; and

2.3.3.3.4.2 States whether the third party is:

2.3.3.3.4.2.1 A service provider that performs marketing services on the licensee's behalf or on behalf of the licensee and another financial institution; or

2.3.3.3.4.2.2 A financial institution with whom the licensee has a joint marketing agreement.

2.3.3.3.5 Simplified notices. If a licensee does not disclose, and does not wish to reserve the right to disclose, nonpublic personal financial information about customers or former customers to affiliates or nonaffiliated third parties except as authorized under Sections 10.0 and 11.0 of this regulation, the licensee may simply state that fact, in addition to the information it shall provide under sections 2.3.1.1, 2.3.1.8, 2.3.1.9 and 2.3.2 of this regulation.

2.3.3.4 Confidentiality and security. A licensee describes its policies and practices with respect to protecting the confidentiality and security of nonpublic personal financial information if it does both of the following:

2.3.3.4.1 Describes in general terms who is authorized to have access to the information; and

2.3.3.4.2 States whether the licensee has security practices and procedures in place to ensure the confidentiality of the information in accordance with the licensee's policy. The licensee is not required to describe technical information about the safeguards it uses.

2.4 Short-form initial notice with opt out notice for non-customers.

2.4.1 A licensee may satisfy the initial notice requirements in subsections 2.1.1.2 and 3.4 of this regulation for a consumer who is not a customer by providing a short-form initial notice at the same time as the licensee delivers an opt out notice as required in Section 3.0 of this regulation.

2.4.2 A short-form initial notice shall:

2.4.2.1 Be clear and conspicuous;

2.4.2.2 State that the licensee's privacy notice is available upon request; and

2.4.2.3 Explain a reasonable means by which the consumer may obtain that notice.

2.4.3 The licensee shall deliver its short-form initial notice according to Section 5.0 of this regulation. The licensee is not required to deliver its privacy notice with its short-form initial notice. The licensee instead may simply provide the consumer a reasonable means to obtain its privacy notice. If a consumer who receives the licensee's short-form notice requests the licensee's privacy notice, the licensee shall deliver its privacy notice according to Section 5.0 of this regulation.

2.4.4 Examples of obtaining privacy notice. The licensee provides a reasonable means by which a consumer may obtain a copy of its privacy notice if the licensee:

2.4.4.1 Provides a toll-free telephone number that the consumer may call to request the notice; or

2.4.4.2 For a consumer who conducts business in person at the licensee's office, maintains copies of the notice on hand that the licensee provides to the consumer immediately upon request.

2.5 Future disclosures. The licensee's notice may include:

2.5.1 Categories of nonpublic personal financial information that the licensee reserves the right to disclose in the future, but does not currently disclose; and

2.5.2 Categories of affiliates or nonaffiliated third parties to whom the licensee reserves the right in the future to disclose, but to whom the licensee does not currently disclose, nonpublic personal financial information.

2.6 Sample clauses and Federal Model Privacy Form. Sample clauses illustrating some of the notice content required by this section are included in Appendix A of this regulation. The Federal Model Privacy Form is codified at 16 CFR Part 313 Appendix A, incorporated herein by reference, as may, from time to time, be amended.

18 Del. Admin. Code § 904-2.0

22 DE Reg. 1017 (6/1/2019) (final)