18 Del. Admin. Code § 904
1.2 Purpose. The purpose of this regulation is to govern the treatment of nonpublic personal financial information about individuals by all licensees of the Delaware Department of Insurance. This regulation:
1.3 Applicability
1.3.2 A licensee is not subject to the notice and opt out requirements for nonpublic personal financial information set forth in Sections 1.0 through 11.0 of this regulation if the licensee is an employee, agent or other representative of another licensee (“the principal”) and:
1.3.3 Examples of employee, agent or other representative of a principal include:
1.3.5 An excess lines broker or excess lines insurer shall be deemed to be in compliance with the notice and opt out requirements for nonpublic personal financial information set forth in Sections 1.0 through 11.0 of this regulation, provided that the broker or insurer:
1.3.5.2 Delivers a notice to the consumer at the time a customer relationship is established on which the following is printed in 16-point type:
PRIVACY NOTICE
NEITHER THE U.S. BROKERS THAT HANDLED THIS INSURANCE NOR THE INSURERS THAT HAVE UNDERWRITTEN THIS INSURANCE WILL DISCLOSE NONPUBLIC PERSONAL INFORMATION CONCERNING THE BUYER TO NON-AFFILIATES OF THE BROKERS OR INSURERS EXCEPT AS PERMITTED BY LAW.
1.5 Rules of Construction
1.6 Definitions. As used in this regulation, unless the context requires otherwise:
“Affiliate” means any company that controls, is controlled by or is under common control with another company.
“Clear and Conspicuous” means that a notice is reasonably understandable as provided in subsection 1.7 of this regulation and is designed to call attention to the nature and significance of the information in the notice as provided in subsection 1.8 of this regulation.
“Collect” means to obtain information that the licensee organizes or can retrieve by the name of an individual or by identifying number, symbol or other identifying particular assigned to the individual, irrespective of the source of the underlying information.
“Commissioner” means the Insurance Commissioner of Delaware.
“Company” means a corporation, limited liability company, business trust, general or limited partnership, association, sole proprietorship or similar organization.
“Consumer” means an individual who seeks to obtain, obtains or has obtained an insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, and about whom the licensee has nonpublic personal information, or that individual’s legal representative as set forth in the examples listed in subsection 1.9 of this regulation.
“Consumer reporting agency” has the same meaning as in Section 603(f) of the federal Fair Credit Reporting Act (15 U.S.C. 1681a(f)).
“Control”means any action that meets the criteria set forth in subsection 1.10 of this regulation.
“Customer” means a consumer who has a customer relationship with a licensee.
“Customer relationship” means a continuing relationship between a consumer and a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes. Examples of “customer relationship” are set forth in subsection 1.11 of this regulation.
“Financial institution” means any institution the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)). Financial institution does not include:
| • | Any person or entity with respect to any financial activity that is subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1et seq.); |
| • | The Federal Agricultural Mortgage Corporation or any entity charged and operating under the Farm Credit Act of 1971 (12 U.S.C. 2001et seq.); or |
| • | Institutions chartered by Congress specifically to engage in securitizations, secondary market sales (including sales of servicing rights) or similar transactions related to a transaction of a consumer, as long as the institutions do not sell or transfer nonpublic personal information to a nonaffiliated third party. |
“Financial product or service” means any product or service that a financial holding company could offer by engaging in an activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)). Financial service includes a financial institution’s evaluation or brokerage of information that the financial institution collects in connection with a request or an application from a consumer for a financial product or service.
“Insurance product or service” means any product or service that is offered by a licensee pursuant to the insurance laws of this state. Insurance service includes a licensee's evaluation, brokerage or distribution of information that the licensee collects in connection with a request or an application from a consumer for a insurance product or service.
“Licensee” means all licensed insurers, producers and other persons licensed or required to be licensed, or authorized or required to be authorized, or registered or required to be registered pursuant to the Insurance Law of this state. A licensee does not include a domestic insurer transacting insurance in foreign countries only, under the laws and regulations of a foreign country only, and not transacting insurance in any state as defined in 18 Del.C. §103 of the Delaware Code. Subject to subsection 1.3.2, “licensee” shall also include an unauthorized insurer that accepts business placed through a licensed excess lines broker in this state, but only in regard to the excess lines placements placed pursuant to the Delaware Insurance Code.
“Nonaffiliated Third Party” means any person except a licensee's affiliate or a person employed jointly by a licensee and any company that is not the licensee's affiliate (but nonaffiliated third party includes the other company that jointly employs the person). Nonaffiliated third party includes any company that is an affiliate solely by virtue of the direct or indirect ownership or control of the company by the licensee or its affiliate in conducting merchant banking or investment banking activities of the type described in Section 4(k)(4)(H) or insurance company investment activities of the type described in Section 4(k)(4)(I) of the federal Bank Holding Company Act (12 U.S.C. 1843(k)(4)(H) and (I)).
“Nonpublic Personal Financial Information” means personally identifiable financial information; and any list, description or other grouping of consumers (and publicly available information pertaining to them) that is derived using any personally identifiable financial information that is not publicly available. Examples of lists of nonpublic personal financial information are set forth in subsection 1.12 of this regulation. Nonpublic personal financial information does not include:
| • | Health information; |
| • | Publicly available information, except as included on a list that meets the definition of “nonpublic personal financial information; or |
| • | Any list, description or other grouping of consumers (and publicly available information pertaining to them) that is derived without using any personally identifiable financial information that is not publicly available. |
“Nonpublic Personal Health Information” means health information that identifies an individual who is the subject of the information; or with respect to which there is a reasonable basis to believe that the information could be used to identify an individual.
“Nonpublic Personal Information” means nonpublic personal financial information and nonpublic personal health information.
“Personally Identifiable Financial Information” means any information a consumer provides to a licensee to obtain an insurance product or service from the licensee; about a consumer resulting from a transaction involving an insurance product or service between a licensee and a consumer; or the licensee otherwise obtains about a consumer in connection with providing an insurance product or service to that consumer. Examples of “personally identifiable financial information” are set forth in subsection 1.13 of this regulation.
“Publicly Available Information” means any information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records; widely distributed media; or disclosures to the general public that are required to be made by federal, state or local law. A licensee has a reasonable basis to believe that information is lawfully made available to the general public if the licensee has taken steps to determine that 1) the information is of the type that is available to the general public; and 2) whether an individual can direct that the information not be made available to the general public and, if so, that the licensee's consumer has not done so. Examples of “publicly available information” are set forth in subsection 1.14 of this regulation.
1.7 A licensee makes its notice “reasonably understandable” for purposes of the defined phrase “clear and conspicuous” if it:
1.8 A licensee designs its notice to “call attention to the nature and significance of the information in it” for purposes of the defined phrase “clear and conspicuous” if the licensee:
1.8.6 If applicable, when notice is provided on a web page, designs its notice to call attention to the nature and significance of the information in it if the licensee uses text or visual cues to encourage scrolling down the page if necessary to view the entire notice and ensure that other elements on the web site (such as text, graphics, hyperlinks or sound) do not distract attention from the notice, and the licensee either:
1.9 Examples of the defined term “consumer” include:
1.9.4 An individual is a licensee's consumer if:
1.9.5 Provided that the licensee provides the initial, annual and revised notices under subsections 2.1 and 2.2 and Section 4.0 of this regulation to the plan sponsor, group or blanket insurance policyholder or group annuity contract holder, workers' compensation plan participant, and further provided that the licensee does not disclose to a nonaffiliated third party nonpublic personal financial information about such an individual other than as permitted under Sections 9.0, 10.0 and 11.0 of this regulation, an individual is not the consumer of the licensee solely because he or she is:
1.10 Examples of the defined term “control” include:
1.11 Examples of the defined term “customer relationship” include:
1.11.1 A consumer has a continuing relationship with a licensee if:
1.11.2 A consumer does not have a continuing relationship with a licensee if:
1.12 Examples of lists of “nonpublic personal financial information” as defined in this regulation include any list of individuals' names and street addresses that is derived in whole or in part using personally identifiable financial information that is not publicly available, such as account numbers; but does not include any list of individuals' names and addresses that:
1.13 Examples of the defined term “personally identifiable financial information” include:
1.13.7 Information from a consumer report; except that personally identifiable financial information does not include:
1.14 Examples of the defined term “publicly available information” include:
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:
2.1.2 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:
2.1.3 When the licensee establishes a customer relationship.
2.1.3.2 Examples of establishing customer relationship. A licensee establishes a customer relationship when the consumer:
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:
2.1.5 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:
2.1.5.2 Examples of exceptions.
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.
2.2.1.2 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:
2.3 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:
2.3.3 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:
2.3.3.2 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:
2.3.3.3 Categories of affiliates and nonaffiliated third parties to whom the licensee discloses.
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:
2.3.3.3.4.2 States whether the third party is:
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:
2.4 Short-form initial notice with opt out notice for non-customers.
2.4.2 A short-form initial notice shall:
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:
2.5 Future disclosures. The licensee’s notice may include:
3.1 Form of opt out notice. If a licensee is required to provide an opt out notice under subsections 6.1 through 6.3 of this regulation, it shall provide a clear and conspicuous notice to each of its consumers that accurately explains the right to opt out under that section. The notice shall state:
3.2 Examples.
3.2.1 Adequate opt out notice. A licensee provides adequate notice that the consumer can opt out of the disclosure of nonpublic personal financial information to a nonaffiliated third party if the licensee:
3.2.2 Reasonable opt out means. A licensee provides a reasonable means to exercise an opt out right if it:
3.2.3 Unreasonable opt out means. A licensee does not provide a reasonable means of opting out if:
3.5 Joint relationships.
3.5.2 Any of the joint consumers may exercise the right to opt out. The licensee may either:
3.5.5 Example. If John and Mary are both named policyholders on a homeowner’s insurance policy issued by a licensee and the licensee sends policy statements to John’s address, the licensee may do any of the following, but it shall explain in its opt out notice which opt out policy the licensee will follow:
3.5.5.3 Permit John and Mary to make different opt out directions. If the licensee does so:
3.8 Duration of consumer’s opt out direction.
4.1 General rule. Except as otherwise authorized in this regulation, a licensee shall not, directly or through an affiliate, disclose any nonpublic personal financial information about a consumer to a nonaffiliated third party other than as described in the initial notice that the licensee provided to that consumer under subsection 2.1 of this regulation, unless:
4.2 Examples.
4.2.1 Except as otherwise permitted by Sections 9.0, 10.0 and 11.0 of this regulation, a licensee shall provide a revised notice before it:
4.3 Delivery.
5.2 Examples of reasonable expectation of actual notice. A licensee may reasonably expect that a consumer will receive actual notice if the licensee:
5.3 Examples of unreasonable expectation of actual notice. A licensee may not, however, reasonably expect that a consumer will receive actual notice of its privacy policies and practices if it:
5.4 Annual notices only. A licensee may reasonably expect that a customer will receive actual notice of the licensee’s annual privacy notice if:
5.6 Retention or accessibility of notices for customers.
5.6.2 Examples of retention or accessibility. A licensee provides a privacy notice to the customer so that the customer can retain it or obtain it later if the licensee:
6.1 Conditions for disclosure. Except as otherwise authorized in this regulation, a licensee may not, directly or through any affiliate, disclose any nonpublic personal financial information about a consumer to a nonaffiliated third party unless:
6.3 Examples of reasonable opportunity to opt out. A licensee provides a consumer with a reasonable opportunity to opt out if:
6.4 Application of opt out to all consumers and all nonpublic personal financial information.
7.1 Information the licensee receives under an exception. If a licensee receives nonpublic personal financial information from a nonaffiliated financial institution under an exception in Sections 10.0 or 11.0 of this regulation, the licensee’s disclosure and use of that information is limited as follows:
7.3 Information a licensee receives outside of an exception. If a licensee receives nonpublic personal financial information from a nonaffiliated financial institution other than under an exception in Sections 10.0 or 11.0 of this regulation, the licensee may disclose the information only:
7.4 Example. If a licensee obtains a customer list from a nonaffiliated financial institution outside of the exceptions in Sections 10.0 or 11.0 of this regulation:
7.5 Information a licensee discloses under an exception. If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under an exception in Sections 10.0 or 11.0 of this regulation, the third party may disclose and use that information only as follows:
7.6 Information a licensee discloses outside of an exception. If a licensee discloses nonpublic personal financial information to a nonaffiliated third party other than under an exception in Sections 10.0 or 11.0 of this regulation, the third party may disclose the information only:
8.2 Exceptions. Subsection 8.1 of this regulation does not apply if a licensee discloses a policy number or similar form of access number or access code:
8.3 Examples.
9.1 General rule.
9.1.1 The opt out requirements in Sections 3.0 and 5.0 of this regulation do not apply when a licensee provides nonpublic personal financial information to a nonaffiliated third party to perform services for the licensee or functions on the licensee’s behalf, if the licensee:
10.1 Exceptions for processing transactions at consumer’s request. The requirements for initial notice in subsection 2.1.1.2, the opt out in Sections 3.0 and 5.0 of this regulation, and service providers and joint marketing in Section 8.0 of this regulation do not apply if the licensee discloses nonpublic personal financial information as necessary to effect, administer or enforce a transaction that a consumer requests or authorizes, or in connection with:
10.2 “Necessary to effect, administer or enforce a transaction” means that the disclosure is:
10.2.2 Required, or is a usual, appropriate or acceptable method:
10.2.2.6 In connection with:
11.1 Exceptions to opt out requirements. The requirements for initial notice to consumers in subsection 2.1.1.2, the opt out in Sections 3.0 and 5.0 of this regulation, and service providers and joint marketing in Section 8.0 of this regulation do not apply when a licensee discloses nonpublic personal financial information:
Nothing in this regulation shall be construed to modify, limit or supersede the operation of the federal Fair Credit Reporting Act (15 U.S.C. 1681 et seq.), and no inference shall be drawn on the basis of the provisions of this regulation regarding whether information is transaction or experience information under Section 603 of that Act.
A licensee shall not unfairly discriminate against any consumer or customer because that consumer or customer has opted out from the disclosure of his or her nonpublic personal financial information pursuant to the provisions of this regulation.
Repeated failure to comply with this Regulation will be grounds for investigation and enforcement as unfair practices in the insurance business pursuant to18 Del.C. Ch. 23.
If any section or portion of a section of this regulation or its applicability to any person or circumstance is held invalid by a court, the remainder of the regulation or the applicability of the provision to other persons or circumstances shall not be affected.
16.6 The exception to the annual notice requirement set forth in subsection 2.2.1.2 of this regulation shall be effective June 11, 2019.
APPENDIX A – SAMPLE CLAUSES
Licensees, including a group of financial holding company affiliates that use a common privacy notice, may use the following sample clauses, if the clause is accurate for each institution that uses the notice. (Note that disclosure of certain information, such as assets, income and information from a consumer reporting agency, may give rise to obligations under the federal Fair Credit Reporting Act, such as a requirement to permit a consumer to opt out of disclosures to affiliates or designation as a consumer reporting agency if disclosures are made to nonaffiliated third parties.)
A-1–Categories of information a licensee collects (all institutions)
A licensee may use this clause, as applicable, to meet the requirement of18 DE Admin. Code 904-2.3.1.1 to describe the categories of nonpublic personal information the licensee collects.
Sample Clause A-1:
We collect nonpublic personal information about you from the following sources:
| • | Information we receive from you on applications or other forms; |
| • | Information about your transactions with us, our affiliates or others; and |
| • | Information we receive from a consumer reporting agency. |
A-2–Categories of information a licensee discloses (institutions that disclose outside of the exceptions)
A licensee may use one of these clauses, as applicable, to meet the requirement of18 DE Admin. Code 904-2.3.1.2 to describe the categories of nonpublic personal information the licensee discloses. The licensee may use these clauses if it discloses nonpublic personal information other than as permitted by the exceptions in 18 DE Admin. Code 904-9.0, 10.0 and 11.0.
Sample Clause A-2, Alternative 1:
We may disclose the following kinds of nonpublic personal information about you:
| • | Information we receive from you on applications or other forms, such as [provide illustrative examples, such as “your name, address, social security number, assets, income, and beneficiaries”]; |
| • | Information about your transactions with us, our affiliates or others, such as [provide illustrative examples, such as “your policy coverage, premiums, and payment history”]; and |
| • | Information we receive from a consumer reporting agency, such as [provide illustrative examples, such as “your creditworthiness and credit history”]. |
Sample Clause A-2, Alternative 2:
We may disclose all of the information that we collect, as described [describe location in the notice, such as “above” or “below”].
A-3–Categories of information a licensee discloses and parties to whom the licensee discloses (institutions that do not disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirements of18 DE Admin. Code 904-2.3.1.2 through 2.3.1.4 to describe the categories of nonpublic personal information about customers and former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses. A licensee may use this clause if the licensee does not disclose nonpublic personal information to any party, other than as permitted by the exceptions in 18 DE Admin. Code 904-10.0 and 11.0.
Sample Clause A-3:
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.
A-4–Categories of parties to whom a licensee discloses (institutions that disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirement of18 DE Admin. Code 904-2.3.1.3 to describe the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal information. This clause may be used if the licensee discloses nonpublic personal information other than as permitted by the exceptions in 18 DE Admin. Code 904-9.0, 10.0 and 11.0, as well as when permitted by the exceptions in 18 DE Admin. Code 904-10.0 and 11.0.
Sample Clause A-4:
We may disclose nonpublic personal information about you to the following types of third parties:
| • | Financial service providers, such as [provide illustrative examples, such as “life insurers, automobile insurers, mortgage bankers, securities broker-dealers, and insurance agents”]; |
| • | Non-financial companies, such as [provide illustrative examples, such as “retailers, direct marketers, airlines, and publishers”]; and |
| • | Others, such as [provide illustrative examples, such as “non-profit organizations”]. |
We may also disclose nonpublic personal information about you to nonaffiliated third parties as permitted by law.
A-5–Service provider/joint marketing exception
A licensee may use one of these clauses, as applicable, to meet the requirements of18 DE Admin. Code 904-2.3.1.5 related to the exception for service providers and joint marketers in 18 DE Admin. Code 904-9.0. If a licensee discloses nonpublic personal information under this exception, the licensee shall describe the categories of nonpublic personal information the licensee discloses and the categories of third parties with which the licensee has contracted.
Sample Clause A-5, Alternative 1:
We may disclose the following information to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements:
| • | Information we receive from you on applications or other forms, such as [provide illustrative examples, such as “your name, address, social security number, assets, income, and beneficiaries”]; |
| • | Information about your transactions with us, our affiliates or others, such as [provide illustrative examples, such as “your policy coverage, premium, and payment history”]; and |
| • | Information we receive from a consumer reporting agency, such as [provide illustrative examples, such as “your creditworthiness and credit history”]. |
Sample Clause A-5, Alternative 2:
We may disclose all of the information we collect, as described [describe location in the notice, such as “above” or “below”] to companies that perform marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements.
A-6–Explanation of opt out right (institutions that disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirement of18 DE Admin. Code 904-2.3.1.6 to provide an explanation of the consumer’s right to opt out of the disclosure of nonpublic personal information to nonaffiliated third parties, including the method(s) by which the consumer may exercise that right. The licensee may use this clause if the licensee discloses nonpublic personal information other than as permitted by the exceptions in 18 DE Admin. Code 904-9.0, 10.0 and 11.0.
Sample Clause A-6:
If you prefer that we not disclose nonpublic personal information about you to nonaffiliated third parties, you may opt out of those disclosures, that is, you may direct us not to make those disclosures (other than disclosures permitted by law). If you wish to opt out of disclosures to nonaffiliated third parties, you may [describe a reasonable means of opting out, such as “call the following toll-free number: (insert number)].
A-7–Confidentiality and security (all institutions)
A licensee may use this clause, as applicable, to meet the requirement of18 DE Admin. Code 904-2.3.1.8 to describe its policies and practices with respect to protecting the confidentiality and security of nonpublic personal information.
Sample Clause A-7:
We restrict access to nonpublic personal information about you to [provide an appropriate description, such as “those employees who need to know that information to provide products or services to you”]. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information.
APPENDIX B. FEDERAL SAMPLE CLAUSES
The Federal sample forms and instructions, as codified at 16 C.F.R. Pt. 313, App. A. (adopted at 74 FR 63966 (Dec. 1, 2009)), as may, from time to time, be amended, are incorporated herein by reference as18 DE Admin. Code 904Appendix B.