Subchapter A. GENERAL PROVISIONS
Sec.
146a.1. Purpose.
146a.2. Definitions.
146a.3. Examples and safe harbor.§ 146a.1. Purpose.
(a) Purpose. This chapter governs the treatment of nonpublic personal financial information about individuals by various licensees of the Department. This chapter:
(1) Requires a licensee to provide notice to individuals about its privacy policies and practices.
(2) Describes the conditions under which a licensee may disclose nonpublic personal financial information about individuals to affiliates and nonaffiliated third parties.
(3) Provides methods for individuals to prevent a licensee from disclosing that information.
(b) Scope. This chapter applies to nonpublic personal financial information about individuals who obtain or are claimants or beneficiaries of products or services primarily for personal, family or household purposes from licensees. Unless otherwise specified, this chapter generally does not apply to information about companies or about individuals who obtain products or services for business, commercial or agricultural purposes.
(c) Compliance. A licensee domiciled in this Commonwealth that is in compliance with this chapter in a state that has not enacted laws or regulations that meet the requirements of Title V of the act of November 12, 1999 (Pub.L. No. 106-102, 113 Stat. 1338) known as the Gramm-Leach-Bliley Act (Financial Services Modernization Act of 1999) (15 U.S.C.A. § § 6801—6827) may nonetheless be deemed to be in compliance with Title V of the Gramm-Leach-Bliley Act in the other state.
Authority The provisions of this § 146a.1 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P.S. § § 66, 186, 411 and 412); and the Unfair Insurance Practices Act (40 P.S. § § 1171.1—1171.15).
Source The provisions of this § 146a.1 amended August 9, 2019, effective August 10, 2019, 49 Pa.B. 4109. Immediately preceding text appears at serial pages (346499) to (346500).
§ 146a.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context requires otherwise:
Act—The Insurance Department Act of 1921 (40 P. S. § § 1—321)
Affiliate—A company that controls, is controlled by or is under common control with another company.
Clear and conspicuous—That a notice is reasonably understandable and designed to call attention to the nature and significance of the information in the notice. Examples include:(i) Reasonably understandable. A licensee makes its notice reasonably understandable if it does all of the following:
(A) Presents the information in the notice in clear, concise sentences, paragraphs and sections.
(B) Uses short explanatory sentences or bullet lists whenever possible.
(C) Uses definite, concrete, everyday words and active voice whenever possible.
(D) Avoids multiple negatives.
(E) Avoids legal and highly technical business terminology whenever possible.
(F) Avoids explanations that are imprecise and readily subject to different interpretations.
(ii) Designed to call attention. A licensee designs its notice to call attention to the nature and significance of the information in it if the licensee does all of the following:
(A) Uses a plain-language heading to call attention to the notice.
(B) Uses a typeface and type size that are easy to read.
(C) Provides wide margins and ample line spacing.
(D) Uses boldface or italics for key words.
(E) In a form that combines the licensee’s notice with other information, uses distinctive type size, style and graphic devices, such as shading or sidebars.
(iii) Notices on websites. If a licensee provides a notice on a webpage, the licensee 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 website (such as text, graphics, hyperlinks or sound) do not distract attention from the notice, and the licensee either:
(A) Places the notice on a screen that consumers frequently access, such as a page on which transactions are conducted.
(B) Places a link on a screen that consumers frequently access, such as a page on which transactions are conducted, that connects directly to the notice and is labeled appropriately to convey the importance, nature and relevance of the notice.
Collect—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—The Insurance Commissioner of the Commonwealth.
Company—A corporation, limited liability company, business trust, general or limited partnership, association, sole proprietorship or similar organization.
Consumer—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 financial information, or that individual’s legal representative. Examples include:(i) An individual who provides nonpublic personal financial information to a licensee in connection with obtaining or seeking to obtain financial, investment or economic advisory services relating to an insurance product or service is a consumer regardless of whether the licensee establishes an ongoing advisory relationship.
(ii) An applicant for insurance prior to the inception of insurance coverage is a licensee’s consumer.
(iii) An individual who is a consumer of another financial institution is not a licensee’s consumer solely because the licensee is acting as agent for, or provides processing or other services to, that financial institution.
(iv) An individual about whom a licensee discloses nonpublic personal financial information to a nonaffiliated third party other than as permitted under Subchapter D (relating to exceptions to limits on disclosures of nonpublic personal financial information) and the individual is one of the following:
(A) A beneficiary of a life insurance policy underwritten by the licensee.
(B) A claimant under an insurance policy issued by the licensee.
(C) An insured or an annuitant under an insurance policy or an annuity, respectively, issued by the licensee.
(D) A mortgagor of a mortgage covered under a mortgage insurance policy.
(v) Provided that the licensee provides the initial, annual and revised notices under § § 146a.11, 146a.12 and 146a.15 (relating to initial privacy notice to consumers required; annual privacy notice to customers required; and revised privacy notices) to the plan sponsor, group or blanket insurance policyholder, group annuity contractholder, or workers’ compensation policyholder, 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 Subchapter D, an individual is not the consumer of the licensee solely because the individual is one of the following:
(A) A participant or a beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer or fiduciary.
(B) Covered under a group or blanket insurance policy or group annuity contract issued by the licensee.
(C) A claimant in a workers’ compensation plan.
(vi) The individuals described in subparagraph (v) are consumers of a licensee if the licensee does not meet all the conditions of subparagraph (v).
(vii) In no event shall the individuals, solely by virtue of the status described in subparagraph (v), be deemed to be customers for purposes of this chapter.
(viii) An individual is not a licensee’s consumer solely because the individual is a beneficiary of a trust for which the licensee is a trustee.
(ix) An individual is not a licensee’s consumer solely because the individual has designated the licensee as trustee for a trust.
Consumer reporting agency—The term has the same meaning as in section 603(f) of the Federal Fair Credit Reporting Act (15 U.S.C.A. § 1681a(f)).
Control—The term includes any of the following:(i) Ownership, control or power to vote 25% or more of the outstanding shares of any class of voting security of the company, directly or indirectly, or acting through one or more other persons.
(ii) Control in any manner over the election of a majority of the directors, trustees or general partners (or individuals exercising similar functions) of the company.
(iii) The power to exercise, directly or indirectly, a controlling influence over the management or policies of the company, as determined by the Commissioner.
Customer—A consumer who has a customer relationship with a licensee.
Customer relationship—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 are as follows:(i) A consumer has a continuing relationship with a licensee if either:
(A) The consumer is a current policyholder of an insurance product issued by or through the licensee.
(B) The consumer obtains financial, investment or economic advisory services relating to an insurance product or service from the licensee for a fee.
(ii) A consumer does not have a continuing relationship with a licensee if one of the following applies:
(A) The consumer applies for insurance but does not purchase the insurance.
(B) The licensee sells the consumer airline travel insurance in an isolated transaction.
(C) The individual is no longer a current policyholder of an insurance product or no longer obtains insurance services with or through the licensee.
(D) The consumer is a beneficiary or claimant under a policy and has submitted a claim under a policy choosing a settlement option involving an ongoing relationship with the licensee.
(E) The consumer is a beneficiary or a claimant under a policy and has submitted a claim under that policy choosing a lump sum settlement option.
(F) The customer’s policy is lapsed, expired or otherwise inactive or dormant under the licensee’s business practices, and the licensee has not communicated with the customer about the relationship for a period of 12-consecutive months, other than annual privacy notices, material required by law or regulation, communication at the direction of a state or Federal authority, or promotional materials.
(G) The individual is an insured or an annuitant under an insurance policy or annuity, respectively, but is not the policyholder or owner of the insurance policy or annuity.
(H) The individual’s last known address according to the licensee’s records is deemed invalid. For the purposes of this section, an address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the individual have been unsuccessful.
Department—The Insurance Department of the Commonwealth.
Federal model privacy form—The model form in 16 CFR Part 313, Appendix A (relating to model privacy form), or a successor provision, which is determined by Federal regulation to be compliant with the requirements of the Gramm-Leach-Bliley Act (15 U.S.C.A. § § 6801—6827).
Financial institution—An institution the business of which is engaging in activities that are financial in nature or incidental to the financial activities as described in section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C.A. § 1843(k)). The term does not include the following:(i) A 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.A. § § 1—25).
(ii) The Federal Agricultural Mortgage Corporation or any entity charged and operating under the Farm Credit Act of 1971 (12 U.S.C.A. § § 2001—2279cc).
(iii) 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 financial information to a nonaffiliated third party.
Financial product or service—A product or service that a financial holding company could offer by engaging in an activity that is financial in nature or incidental to the financial activity under section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C.A. § 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.
Health care—The term includes the following:(i) Preventative, diagnostic, therapeutic, rehabilitative, maintenance or palliative care, services, procedures, tests or counseling that either:
(A) Relates to the physical, mental or behavioral condition of an individual.
(B) Affects the structure or function of the human body or any part of the human body, including the banking of blood, sperm, organs or any other tissue.
(ii) Prescribing, dispensing or furnishing to an individual drugs or biologicals, or medical devices or health care equipment and supplies.
Health care provider—A physician or other health care practitioner licensed, accredited or certified to perform specified health services consistent with State law, or a health care facility.
Health information—Any information or data except age or gender, whether oral or recorded in any form or medium, created by or derived from a health care provider or the consumer or customer that relates to one or more of the following:(i) The past, present or future physical, mental or behavioral health or condition of an individual.
(ii) The provision of health care to an individual.
(iii) Payment for the provision of health care to an individual.
Insurance product or service—A product or service that is offered by a licensee under the insurance laws of the Commonwealth. 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 an insurance product or service.
Licensee—(i) A licensed insurer, as defined in section 201-A of the act (40 P. S. § 65.1-A), a producer and other persons or entities licensed or required to be licensed, or authorized or required to be authorized, or registered or required to be registered under the act or The Insurance Company Law of 1921 (40 P. S. § § 341—999), including health maintenance organizations holding a certificate of authority under section 201 of the Health Care Facilities Act (35 P. S. § 448.201).
(ii) The term does not include:
(A) Bail bondsmen as defined in 42 Pa.C.S. § 5741 (relating to definitions).
(B) Motor vehicle physical damage appraisers as defined in section 2 of the Motor Vehicle Physical Damage Appraiser Act (63 P. S. § 852) and § 62.1 (relating to definitions).
(C) Public adjusters as defined in section 1 of the act of December 20, 1983 (P. L. 260, No. 72) (63 P. S. § 1601) and § 115.1 (relating to definitions).
(D) An entity providing continuing care as defined in section 3 and licensed under section 4 of the Continuing-Care Provider Registration and Disclosure Act (40 P. S. § § 3203 and 3204).
(iii) Subject to subparagraph (iv), the term does not include governmental health insurance programs such as the following:
(A) The Children’s Health Insurance Program as provided for in the Children’s Health Care Act (40 P. S. § § 991.2301—991.2361).
(B) The Medicaid Program as provided for in 62 P. S. § § 441.1—449.
(C) The Medicare+Choice Program as provided for in the Balanced Budget Act of 1997, sections 1851—1859, Medicare Part C under Title XVIII of the Social Security Act.
(iv) The term includes a licensee that enrolls, insures or otherwise provides insurance related services to participants that procure health insurance through a governmental health insurance program exempted under subparagraph (iii).
(v) A licensee is not subject to the notice and opt out requirements for nonpublic personal financial information in this subchapter and Subchapters B—D if the licensee is an employee, agent or other representative of another licensee (‘‘the principal’’) and both of the following apply:
(A) The principal otherwise complies with, and provides the notices required by, this chapter.
(B) The licensee does not disclose nonpublic personal financial information to any person other than the principal or its affiliates in a manner permitted by this chapter.
(vi) Subject to subparagraph (vii), the term ‘‘licensee’’ shall also include a nonadmitted insurer that accepts business placed through a surplus lines licensee (as defined in 40 P. S. § 991.1602 (relating to definition of surplus lines licensee)) in this Commonwealth, but only in regard to the surplus lines placements placed under Article XVI of The Insurance Company Law (40 P. S. § § 991.1601—991.1625).
(vii) A surplus lines licensee or surplus lines insurer shall be deemed to be in compliance with the notice and opt out requirements for nonpublic personal financial information in this subchapter and Subchapters B—D provided both of the following apply:
(A) The surplus lines licensee or insurer does not disclose nonpublic personal financial information of a consumer or a customer to nonaffiliated third parties for any purpose, including joint servicing or marketing under § 146a.31 (relating to exception to opt out requirements for disclosure of nonpublic personal financial information for service providers and joint marketing), except as permitted by § 146a.32 or § 146a.33 (relating to exceptions to notice and opt out requirements for disclosure of nonpublic personal financial information for processing and servicing transactions; and other exceptions to notice and opt out requirements for disclosure of nonpublic personal financial information).
(B) The broker or insurer 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 HAVE HANDLED THIS INSURANCE NOR THE INSURERS THAT HAVE UNDERWRITTED THIS INSURANCE WILL DISCLOSE NONPUBLIC PERSONAL FINANCIAL INFORMATION CONCERNING THE BUYER TO NONAFFILIATED THIRD PARTIES EXCEPT AS PERMITTED BY LAW.’’
Nonaffiliated third party—(i) Any person except either:
(A) A licensee’s affiliate.
(B) 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).
(ii) 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.A. § § 1843(k)(4)(H) and (I)).
Nonpublic personal financial information—(i) The term means the following:
(A) Personally identifiable financial information.
(B) 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.
(ii) The term does not include any of the following:
(A) Publicly available information, except as included on a list described in subparagraph (i)(B).
(B) 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.
(C) Health information.
(iii) Examples of lists are as follows:
(A) Nonpublic personal financial information includes 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.
(B) Nonpublic personal financial information does not include any list of individuals’ names and addresses that contains only publicly available information, is not derived in whole or in part using personally identifiable financial information that is not publicly available, and is not disclosed in a manner that indicates that any of the individuals on the list is a consumer of a financial institution.
Personally identifiable financial information—(i) The term means any of the following:
(A) Information that a consumer provides to a licensee to obtain an insurance product or service from the licensee.
(B) Information about a consumer resulting from a transaction involving an insurance product or service between a licensee and a consumer.
(C) Information that the licensee otherwise obtains about a consumer in connection with providing an insurance product or service to that consumer.
(ii) Examples are as follows:
(A) Information included. Personally identifiable financial information includes:
(I) Information a consumer provides to a licensee on an application to obtain an insurance product or service.
(II) Account balance information and payment history.
(III) The fact that an individual is or has been one of the licensee’s customers or has obtained an insurance product or service from the licensee.
(IV) Information about the licensee’s consumer if it is disclosed in a manner that indicates that the individual is or has been the licensee’s consumer.
(V) Information that a consumer provides to a licensee or that the licensee or its agent otherwise obtains in connection with collecting on a loan or servicing a loan.
(VI) Information the licensee collects through an Internet cookie (an information-collecting device from a web server).
(VII) Information from a consumer report.
(B) Information not included. Personally identifiable financial information does not include:
(I) A list of names and addresses of customers of an entity that is not a financial institution.
(II) Information that does not identify a consumer, such as aggregate information or blind data that does not contain personal identifiers such as account numbers, names or addresses.
(III) Health information.
Publicly available information—Information that a licensee has a reasonable basis to believe is lawfully made available to the public from one or more of the following:(i) Federal, State or local government records.
(ii) Widely distributed media.
(iii) Disclosures to the public that are required to be made by Federal, State or local law.
Reasonable basis—
(i) A licensee has a reasonable basis to believe that information is lawfully made available to the public if the licensee has taken steps to determine the following:
(A) That the information is of the type that is available to the public.
(B) Whether an individual can direct that the information not be made available to the public and, if so, that the licensee’s consumer has not done so.
(ii) The term includes the following conditions:
(A) A licensee has a reasonable basis to believe that mortgage information is lawfully made available to the public if the licensee has determined that the information is of the type included on the public record in the jurisdiction where the mortgage would be recorded.
(B) A licensee has a reasonable basis to believe that an individual’s telephone number is lawfully made available to the public if the licensee has located the telephone number in the telephone book or the consumer has informed the licensee that the telephone number is not unlisted.
(iii) Examples are as follows:
(A) Government records. Publicly available information in government records includes information in government real estate records and security interest filings.
(B) Widely distributed media. Publicly available information from widely distributed media includes information from a telephone book, a television or radio program, a newspaper or a website that is available to the public on an unrestricted basis. A website is not restricted merely because an Internet service provider or a site operator requires a fee or a password, so long as access is available to the public.
Authority The provisions of this § 146a.2 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P.S. § § 66, 186, 411 and 412); and the Unfair Insurance Practices Act (40 P.S. § § 1171.1—1171.15).
Source The provisions of this § 146a.2 amended August 9, 2019, effective August 10, 2019, 49 Pa.B. 4109. Immediately preceding text appears at serial pages (346500), (281737) to (281744) and (305063).
Cross References This section cited in 31 Pa. Code § 146b.2 (relating to definitions); and 31 Pa. Code § 146c.2 (relating to definitions).
§ 146a.3. Examples and safe harbor.
(a) Compliance. If a licensee uses an example, sample clause or Federal model privacy form, the licensee shall be considered compliant with a corresponding requirement of this chapter to the extent applicable. Licensees may rely on the Federal model privacy form used in accordance with its attached instructions as a safe harbor for compliance with the requirements of this section related to privacy notice content.
(b) Nonexclusive means of compliance. The examples in this chapter, the sample clauses in Appendix A (relating to sample clauses) and the Federal model privacy form are not the exclusive means of compliance with the requirements of this chapter. Licensees may continue to use other types of privacy notices, including notices that contain examples or the sample clauses in Appendix A, or both, provided that the notices accurately describe the licensee’s privacy practices and otherwise meet the privacy notice content requirements of this chapter.
(c) Sunset of safe harbor for sample clauses in Appendix A. While licensees may continue to use privacy notices that contain examples and the sample clauses in Appendix A, licensees may not rely on the use of privacy notices containing the sample clauses in Appendix A as a safe harbor for compliance with the privacy notice content requirements of this chapter after July 1, 2019.
Authority The provisions of this § 146a.3 issued under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P.S. § § 66, 186, 411 and 412); and the Unfair Insurance Practices Act (40 P.S. § § 1171.1—1171.15).
Source The provisions of this § 146a.3 adopted August 9, 2019, effective August 10, 2019, 49 Pa.B. 4109.
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