Term
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Definition
| Responsibility to regulate insurance industry is shared jointly by federal govt and state govt. The authority granted to state government was granted through the passage of Public Law 15, McCarren Ferguson Act., by congress in 1945, declaring that the regulation of insurance companies should remain with the individual states. The act reserved for the federal govt the authority to regulate insurance in areas such as fair labor and antitrust. State carries major burden of regulating insurance affairs including ethical conduct of adjusters, agents, producers and anyone licensed to conduct business within its borders. |
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Term
| The insurance commissioner/director |
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Definition
| Main roll of commissioner/director/superintendent and the insurance dept is the enforcement of state laws and regulations which are intended to promote welfare of general public and protect public interest. |
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Term
| Insurance commissioner/director does his job by |
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Definition
| monitoring financial solvency of insurance companies, monitoring the conduct of individual insurance agents, reviewing and approving rates, policies and forms, and assuring the public of insurance availability |
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Term
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Definition
| Insurer’s rates are filed with the state based on loss ratios of the various classes of risk. Many components are involved with rate filing. Loss costs are based on combined loss and expense ratios which represent the most important components of an insurance rate. Oldest form of rating is known as judgment rating. Using this method the premium is determined by considering the individual risk. No books or tables are used. |
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Term
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Definition
| Insurance commissioner/direct has powers to conduct hearings in regard to possible unlawful acts in the performance of agents, adjusters, and companies. Following a hearing they may issue a cease and desist order demanding that the offender immediately refrain from committing the offenses. They may suspend, revoke or fine the offender depending on the nature of the offense or if it was intentional |
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Term
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Definition
| an authorized company approved to do business in a given state. Once accompany is approved they are given a certificate of authority to operate in the state. The insurers will then file rates and forms with the insurance department and begin the process of appointing agents or make their products through other means. |
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Term
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Definition
| an unauthorized company that cannot conduct business in that state. |
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Term
| Surplus lines companies that market products through surplus lines agents |
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Definition
| a company that may operate in a state and not be considered an admitted company. Surplus lines agents collect a premium tax on all business written through surplus lines companies which is remitted to the state. They do not file rates and forms nor do they participate in the states guaranty funds that pay covered losses of insolvent insurers. |
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Term
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Definition
| an insurance company formed and domiciled under the laws of a particular state |
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Term
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Definition
| an insurance company formed under the laws of the United States or a particular state of the US |
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Term
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Definition
| insurance company formed under the laws of a country other than the US, its districts, territories, commonwealths, possessions and the Panama Canal Zone. |
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Term
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Definition
| incorporated insurance company with its capital divided into shares. A stock company is owned by its stockholders. |
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Term
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Definition
| incorporated insurance company without permanent stock that is owned by its policyholders |
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Term
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Definition
| a member of the reciprocal agrees to share in the risk. Lloyds of London is an ex. It consists of members, represented by underwriters who place the risk among its members. In case of a loss the amount paid is shared by the participating members who accepted the risk |
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Term
| Fraternal benefit society |
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Definition
| incorporated society or order without capital stock that is operated on the lodge system and conducted solely for the benefit of its members and their beneficiaries, not for profit. Mostly health and life insurance |
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Term
| Risk retention and purchasing groups |
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Definition
| congress passed liability risk retention act to give product manufacturers more options when insuring against product liability. To facilitate, the act allowed product manufacturers to establish group self insurance programs or group captive insurance companies, called risk retention groups to protect them against product liability exposures and to purchase liability insurance on a group basis through purchasing groups. The act accomplished this by limiting the states authority to regulate product liability insurance. Risk retention groups and purchasing groups are regulated in the states where they are domiciled but they can transact business in all other states. This exempts them from state insurance regulation and guaranty funds. In 1986 the act was amended giving the right to form risk retention groups and purchasing groups to nearly all businesses. They are prohibited from writing workers comp and personal line insurance. |
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Term
| Private and government insurers |
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Definition
| govt can provide insurance that is not typically provided from private insurers. Called residual market insurance. |
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Term
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Definition
| war risk insurance, nuclear energy liability insurance, flood insurance, federal crop insurance, and federal crime insurance. At state level they provide unemployment and some workers compensation benefits. |
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Term
| Captive insurance company |
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Definition
| when permitted by its articles of incorporation, articles of organization, operating agreement, or charter, may apply to the commissioner for al license to conduct any and all insurance except workers comp, personal motor vehicle insurance, or homeowner insurance. |
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Term
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Definition
| part or all of the risk of liss is borne without the benefit of insurance coverage to fall back on if a loss occurs. Some companies self insure because they have the resources to withstand losses and their claims experience demonstrates that it is cheaper to be self insured rather than pay for insurance coverage |
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Term
| 4 basic distribution systems used to market insurance |
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Definition
| Exclusive agency system, direct writer system, direct response system, independent agency system. |
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Term
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Definition
| insurance company contracts with agencies which are independent businesses to represent and sell insurance only for that insurance company. |
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Term
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Definition
| insurance companies agents are actually employees. They may receive a salary, receive commission, or both. |
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Term
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Definition
| no agents. Sell through direct mail or phone |
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Term
| Independent agency system |
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Definition
| agencies that are independent contractors contract with several different companies to represent and sell for those companies. An agent who represents more than one company. |
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Term
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Definition
| Insurance companies are rated on their financial strength. Based off of an analysis of companies claims experience, investment performance, mgmt, and other factors. |
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Term
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Definition
A++,A+- superior- strongest position
A, A- Excellent
B++, B+ very good
B, B- Good
C++, C+ Fair
C, C- marginal
D Below min standards
E Under state supervisions
F in liquidation |
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Term
| General Requirements for licensing |
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Definition
1) Most states require the applicant be at least 18
2) Be a resident of the state
3) Satisfies the commissioner/insurance department, that the applicant is trustworthy
4) Individual has not committed a felony or had his or her licenses revoked in another state
5) Satisfied the requirements of obtaining a license |
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Term
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Definition
| Insurance agents are granted powers by the insurance company to bind or accept risks on behalf of the insurer. They are to act within the limitations specified int eh contract between the agent and the insurance company. Sometimes referred to as agent authority. Once an agent has been licensed, state monitors the activities of both the insurance company and the agent. |
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Term
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Definition
| expressed, implied and apparent |
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Term
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Definition
| given to the agent either in writing or orally |
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Term
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Definition
| allows the agent to perform all the usual tasks required to sell and service the insurance contracts and to exercise the agents express authority |
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Term
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Definition
| assumes that the agent has the authority that a normal prudent person would think or be lead to believe they have. Ex- apparent authority to bind insurance coverage |
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Term
| An Agents responsibility (authority) includes |
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Definition
Selling insurance
Collecting premiums (if the agent accepts premium is the same as the insurer accepting)
Servicing the contract (advice and claims reporting)
Issuing and countersigning policies
They act as the representative for the insurance company and the link between the insured and insurer |
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Term
| Maintenance of agent and adjuster licenses |
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Definition
1) Must file with the commissioner/insurance department the complete address of his/her principle place of business and the complete address of his/her residence
2) Should there be a change of address it is the obligation of the agent to notify the insurance commissioner/insurance dept of the state in which licensed.
3) In many states there is a requirement to complete some form of continuing education to maintain an insurance license. This is left up to the states to determine the number of hours an agent must complete |
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Term
| License Revocation, Suspension, or Penalty |
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Definition
| Guidelines have been adopted by most states as a demonstration of lack of trustworthiness or competency. A hearing will be held and license revocation, suspension, or penalty will result if the commissioner/department of insurance determines the agent or adjuster has committed one. |
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Term
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Definition
1) Violated any insurance law or any lawful rule, regulation, or order of the commissioner/insurance department
2) Improperly withheld, misappropriated, or converted to his own use any money received in the course of business that belongs to policyholders, insurers, beneficiaries, or others
3) Misrepresented the terms of any exsiting or proposed insurance contract to the detriment of the applicant or insured
4) Engaged in any pattern of unfair methods of competition or unfair or deceptive acts or practices in the business of insurance
5) Forged another person’s name to any document or fraudulently procured a forged signature to any document, knowing such signature to be forged
6) Knowingly and willfully made or permitted a false or fraudulent statement or misrepresentation in or relative to the adjustment of any claim
7) Been convicted of or pleaded nolo contendere (no contest) to any felony
8) Been convicted of or pleaded nolo contendere (no contest) to a misdemeanor in connection with his activities as an adjuster or agent
9) Had an agents, brokers, or adjusters license suspended or revoked in any other state, district, or territory of the United States or any province in Canada
10) Obtained a license as an agent, broker, or adjuster through misrepresentation, fraud, or any other act for which issuance of the license could have been refused had it been known to the commissioner/insurance department at the time of issuance
11) Committed any other act that inherently demonstrates untrustworthiness or lack of competence |
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Term
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Definition
| Unfair methods of competition or unfair or deceptive acts or practices. It is against the law for any person or company to engage in any unfair methods of competition or any unfair or deceptive practices in the insurance business in this state. Commissioner/insurance department is charged with responsibility of protecting the public from unfair trade practices by agents and companies |
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Term
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Definition
occurs if the buyer of an insurance policy receives any part of the agents commission or anything of significant value as an inducement to purchase a policy. In this state practice of rebating is illegal and the following are defined as illegal inducements to buy: Offering, paying or allowing any rebate or other inducement not specificied in the policy or any special favor or advantage concerning the dividends or other benefits that will accrue, in order to place, negotiate, or renew the policy
Offering, selling or purchasing anything of value not specified in the policy
Offering, paying or allowing any rebate of any premium on any insurance policy or annuity contract |
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Term
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Definition
| unethical act of persuading a policy owner to drop a policy solely for the purpose of selling another policy without regard to possible disadvantage to the policy owner. Involves some kind of misrepresentation by the agent to convince the policy owner to switch insurance companies and or policies. Ex- persuading a policy owner to surrender a whole life policy and use the cash value to make other investments |
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Term
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Definition
| false or malicious communication, written or oral, that injures another’s reputation, fame, or character. Unethical agents practice defamation by spreading rumors or falsehoods about the character of a competing agent or the financial condition of another insurance company. |
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Term
| Misrepresentation and False advertising |
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Definition
no person shall make, issue, circulate or cause to be made, issued or circulated, any estimate, circular , statement, sales presentation omission or comparison that falls under the outlined.
1)Misrepresents the benefits, advantages, conditions or terms of any insurance policy
2)Misrepresents the dividends or share of the surplus to be received on any insurance policy
3)Make any false or misleading statements as to the dividends or share of surplus
4)Is misleading or is a misrepresentation as to the financial condition of any person
5)Uses any name or title of any insurance policy or class of insurance policies misrepresenting the true nature thereof
6)Is a misrepresentation for the purpose of inducing or tending to induce the lapse, forfeiture exchange, conversion or surrender or any insurance policy?
7)Is a misrepresentation for the purpose of effecting a pledge or assignment of or affecting a loan against any insurance policy?
8)Misrepresents any insurance policy as being shares of stock |
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Term
| Unfair claim settlement practice |
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Definition
| a company/agent must act in good faith in claim settlements and promptly pay its obligation to the insured in the event of a loss. No person shall commit or perform with such frequency as to indicate a general business practice any of the outlined. |
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Term
| Unfair Claim Settlement Practice charges |
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Definition
1)Misrepresenting pertinent facts or insurance policy provisions relating to coverage’s at issue
2)Failing to acknowledge and act reasonably and promptly upon communications with respect to claims arising under insurance policies
3)Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies
4)Refusing to pay claims without conducting a reasonable investigation based upon all available information
5)Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed
6)Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear
7)Compelling insured’s to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insured’s, when such insured’s have made claims for amount reasonably similar to the amounts ultimately recovered
8)Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application
9)Attempting to settle claims on the basis of an application which was altered without notice to, or the knowledge of, the insured
10)Making claims payments to insured’s or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made
11)Making known to insured’s or claimants a policy of appealing from arbitration awards in favor of insured’s or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration
11)Delaying the investigation or payment of claims by requiring an insured, clmt, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which contain substantially the same information
12)Failing to promptly settle claims where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage
13)Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or the offer of a compromise settlement
14)Failing to notify the first party clmt and the provider of services covered under accident and sickness insurance and hospital and medical service corporation insurance policies whether the claim has been accepted or denied. And if denied the reasons for denial, within a specified number of days from the filing of the proof of loss. Should benefits due the clmt be assigned, notice to the clmt shall not be required. However, should benefits be payable directly to the clmt, notice to the health care provider shall not be required. If the insurer needs more time to investigate the claim, it shall so notify the first party clmt in writing within a specified number of days from the date of the initial notification and a specified number of days, thereafter; but in no instance shall a claim remain unsettled and unpaid for more than a specified number of days from the first party clmts filing of the proof of loss unless there is, as determined by the insurance commissioner/insurance dept 1) a legitimate dispute as to coverage, liability, or damages. 2) If the clmt has fraudulently caused or contributed to the loss. In the event that the insurer fails to pay the claim in full within a specified number of days from the claimants filing of the proof of loss, except for exemptions provided above there shall be assessed against the insurer and paid to the insured, a penalty which will be in addition to the amount of the claim and assessed as interest on such at an amount determined by state law. Any penalty paid by an insurer pursuant to this section shall not be a consideration in any rate filing made by such insurer. |
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Term
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Definition
| defined as a person or institution that has responsibility for the money, property or financial affairs of another. Agents have fiduciary duties toward their clients, as well as the insurer, for the collection and handling of premiums. Agent is not supposed to co mingle the funds of others with their personal funds. Agent is also charged to comply with the terms of the agency contract in accepting risks that are within the limitations and spirit of the agreement |
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Term
| coercion, boycott, intimidation |
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Definition
| a person shall not enter into any agreement to commit any act of coercion, intimidation or boycott resulting in unreasonable restraint of , or monopoly in, the business of insurance |
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Term
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Definition
| insurance codes define premium as the consideration for insurance. Any and all charges made by an agent when taking an application, issuing a policy and for services rendered area ll premium charges. Commission paid to an agent by the insurer constitutes the entire compensation due thte agent in connection with the solicitation, negotiation, making or servicing an insurance policy. When an agent charges an extra fee, this charge amounts to an overcharge of premium constituting unfair discrimination against the insured charged. Agent will be charged for engaging in an unfair trade practice and subject to the appropriate penalties of law governing that activity |
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Term
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Definition
| neither agents nor insurance companies are permitted to discriminate against perspective insured’s. This means that a person cannot be given a different rate for coverage than a person in identical circumstances. Race, religion, type of job, living arrangements or financial status may not be discriminated against. |
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Term
| Unfair trade practices regulation |
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Definition
| applies to all persons and to all insurance policies and insurance contracts except workers comp, title insurance and fidelity and surety bonds. This regulation is not exclusive and other acts not heir in specified may also constitute unfair claims settlement practices. |
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Term
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Definition
| Fair Access to Insurance Requirements |
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Term
| Fair Access to Insurance Requirements |
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Definition
| Sometimes a consumer is unable to obtain reasonably prices property insurance in standard markets. Under FAIR, no application can be rejected because of environmental hazards that are beyond the control of the insured. Property is accepted before acceptance under the plan. |
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Term
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Definition
| Guaranty plans pay covered losses of insolvent insurers. Most states max limit is 300,000 for any one loss. Also allows for return of premium on a policy issued by insolvent insurer. Deductible is usually 100. Certain coverage’s such as life and health claims can be exempt; some states have separate guaranty funds for those types of claims. Limit does not apply to workers comp claims. Funded through assessments made of those carriers writing the covered lines of insurance in the state. Amount of assessment is based on a percentage of the company’s writings. |
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Term
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Definition
| Almost all states have an assigned risk plan for the placement of auto insurance. Those companies that write auto coverage must participate in the plan. Designed to provide a market for coverage where the applicant has been unable to obtain coverage in the usual marketplace. Carrier is usually required to write the risk for at least 3 years or until coverage is placed outside the plan |
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Term
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Definition
| Terrorism Risk Insurance Act |
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Term
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Definition
Before 9/11 terrorism coverage was routinely included in commercial insurance policies. After 9/11 (40-50bill in insurance), companies increased premiums or dropped the coverage. This caused billions of transactions to be put on hold.
In 2002 congress passed the Terrorism Risk Insurance Act (Nov 26). The Act establishes a temporary federal program through which the federal government shares with the insurance industry losses resulting from acts of terrorism. It’s an agreement to provide market for coverage. Ensures that terrorism insurance will be available, permitting projects and transactions to move forward. Requires an additional premium |
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Term
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Definition
Commercial property insurance
Commercial casualty insurance (including excess lines)
Workers compensation insurance; and
Surety coverage |
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Term
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Definition
Crop-hail
Livestock
Private mortgage guaranty
Financial guaranty
Medical malpractice
Life and health
Flood
Reinsurance and retrocession insurance
Commercial auto
Crime
Surgery
Farmowenrs
Professional liability (directors and officers liability is covered) |
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Term
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Definition
| any act that is certified by the secretary of the treasury, in concurrence with the secretary of state and the attorney General of the US that is determined to be: |
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Term
| An act of terrorism is determined by |
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Definition
To e a violent act or an act that is dangerous to human life, property, or infrastructure
To have resulted in damage within the US or outside the US in the case of
an air carrier or US flag vessel on which US income tax is paid whose insurance coverage is subject to regulation in the US regardless of where the loss occurs, or at the premises of any US mission;
The premises of a US mission;
Have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest as part of an effort to coerce the civilian population of the US or to influence the policy or affect the conduct of the US govt by coercion |
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Term
| No act shall be certified by the Secretary as an act of terrorism if |
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Definition
The act is committed as a party of the course of a ware declared by the Congress, except that this clause shall not apply with respect to any coverage for workers compensation;
Property and casualty insurance losses resulting the act in the aggregate do not exceed 5,000,000 |
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Term
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Definition
| Program requirements apply to commercial property and casualty insurance as defined by the fed govt. insurers are required to make terrorism coverage available to all policy holders at a reasonable, stated premium. Insured’s can reject the coverage. |
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Term
| If an act is declared terrorism |
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Definition
| insurers pay losses without subsidy from govt up to 100 million. After combined losses of all insurers exceed 100 million the fed gov subsidizes insurers for the losses. If the combined losses of all insurers involved in the event exceed 100 million the program trigger is applicable requiring the government to share in the losses. Each insurer has a deductible which is 20% of its total claims for the event. The government will pay 85% of the remaining loss amounts with the insurer still being responsible for another 15% of the claims. If the losses in any one year exceed 100 billion for all insurers the govt pays for losses over that amount |
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Term
| Changes to TRIA as of 2007 extension act |
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Definition
1)Revising definition of a “certified act” of terrorism to remove the requirement that I individuals must be acting on behalf of foreign person or foreign interest
2)Requiring clear and conspicuous notice to policy holders of the existence of the 100 billion cap
3)Requiring US treasury to promulgate regulations for determining pro-rate shares of insured losses under the program when insured losses exceed 100 billion
4)Requiring the comptroller general to study the availability and affordability of insurance coverage for losses caused by terrorist attacks involving nuclear, biological, chemical, or radiological materials and issue a report in one year
5)Requiring the comptroller general to determine whether there are specific markets in the US where there are unique capacity constraints not eh amount of terrorism insurance available and issue a report in 180 days
6)Requiring the presidents working group on financial markets to continue an ongoing study of the long term availability and affordability of terrorism risk insurance
7)Accelerating the timing of the mandatory recoupment of the federal share through policyholder surcharges |
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Term
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Definition
| most significant change to the act that affects rate, rule or form filings is the elimination of the requirement that individuals must act on behalf of a foreign person or foreign interest. This means that acts formerly referred to as domestic terrorism may be certified as an act of terrorism under TRIA. May require some insurers or rating organizations to amend rates, rules or forms. |
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Term
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Definition
any written, oral, or other communication by a consumer reporting agency that:1)Bears on a consumers creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, and;
2)Is used as a factor in establishing the consumer’s eligibility for credit or insurance to be used primarily for personal, family, household purposes, or is used to employment purposes |
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Term
| A consumer reporting agency may furnish a consumer report to a person it has reason to believe intends to use the information: |
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Definition
1)In connection with a credit transaction involving the consumer about whom the info is to be furnished.
2)For employment purposes
3) In connection with underwriting insurance involving the consumer |
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Term
| A consumer reporting agency may not |
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Definition
furnish a consumer report that contains medical information about the consumer unless the consumer consents. Reports may list adverse information about the consumer such as lawsuits, judgments, arrests and convictions only if the items occurred within 7 years before the report. Bankruptcies may be included if they predate the report by 10 years or less. These restrictions do not apply to consumer credit report used in connection with
1)A credit transaction involving a principal amount of 150,000 or more
2)Life insurance underwriting involving face amount of 150,000 or more
3)Employment of any individual at an annually salary that equals or that may reasonably 4)be expected to equal 75,000 or more |
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Term
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Definition
| If there is written request by the consumer, a person who procures an investigative consumer report on the consumer must make a complete and accurate disclosure of the nature and scope of the investigation requested. Disclosure must be made in writing and mailed to the consumer no later than five days after the date on which the request for the discloser was received from the consumer , or the report was first requested- whichever is later |
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Term
| Anyone engaged in insurance business that makes false material statements or reports |
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Definition
| reports faces fine and/or imprisonment for up to 10 years. If safety and soundness of an insurer is jeopardized and there was a significant cause of the insurer being placed in conservation, rehab, liquidation the term could be 15 years. This is for willfully and materially overvaluing of any land, property or security in connection with financial reports or documents. |
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Term
| Anyone who willfully embezzles, abstracts, purloins, or misappropriates any of the moneys, funds, premiums, credits, or other property of an insurer |
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Definition
| may be punished with a fine and/or imprisonment for up to 10 years. If the crime jeopardizes the safety and soundness of an insurer and was a significant cause of the insurer being place in conservation, rehab, or liquidation by an appropriate court, prison term may be up to 15 years. |
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Term
| Any insurance professionally that knowingly makes any false entry of material facts in any book, report or statement of a person engaged in the insurance business with intent to deceive another person about the financial condition or solvency of the business may be punished |
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Definition
| with a fine and/or imprisonment for up to 10 years. If safety/soundness is jeopardized prison may be for 15 years |
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Term
| Anyone who threatens, forces, or corruptly influences, obstructs or impedes the due and proper administration of the law under any proceeding involving the insurance business may |
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Definition
| be fined and/or imprisoned for up to 10 years. |
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Term
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Definition
| An insurance professional who has been convicted of any criminal felony involving dishonesty or a breach of trust, or who has been convicted of an offense under this section, may be fined and/or imprisoned for up to 5 years. After committing a felony of this nature, the offender may not engage in the business of insurance unless he or she obtains the written consent of an insurance regulatory official |
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Term
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Definition
In 2003 the Federal Trade Commission (FTC) created the Telemarketing and Consumer Fraud and Abuse Prevention Act. Gives the FTC and state attorneys general law enforcement tools to combat telemarketing fraud, give consumers added privacy protections and defenses against unscrupulous telemarketers and helps consumers tell the difference between fraudulent and legitimate telemarketing. Also prohibits calling consumers who’s numbers are on the National Do Not Call Registry and covers the solicitation of charitable contributions by for profit telemarketers.
Starting in Sept 2009 amendments prevented prerecorded commercial telemarketing calls to consumers unless the telemarketer has obtained permission in writing from consumers who want to receive such calls. If they transmit prerecorded calls to people who have not granted permission they face penalties of up to 16,000 dollars per call. This does not prohibit purely informational prerecorded calls, just cannot promote the sale of any goods or services |
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Term
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Definition
In 2003 congress enacted the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act to curb spam. The FCC adopted rules that prohibit sending unwanted commercial email messages to wireless devices without prior permission. This ban took place in March 2005. The FTC also adopted detailed rules that restrict sending unwanted commercial email messages to computers.
FCC’s ban on sending unwanted email messages to wireless devices applies to all “commercial messages”. Commercial messages are defined as those for which the primary purpose is to advertise or promote a commercial product or service. The ban does not cover transactional or relationship messages, or notices to facilitate a transaction a consumer has already agreed to. These messages would include statements about an existing account or warranty information about a product already purchased. The ban also does not cover non-commercial messages such as messages about candidates for public office. |
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Term
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Definition
Gramm-Leach Bliley Act also known as the Financial Modernization Act of 1999, if a federal law enacted in the US to control the ways that financial institutions deal with private info of individuals. It requires such companies to give customers written privacy notices to explain their information sharing practices and to safeguard sensitive data. Act consists of 3 sections:
1) Financial privacy rule which regulates the collection and disclosure of private financial information
2) Safeguards rule, which stipulates that financial institutions must implement security programs to protect such information and
3) Pretexting provisions which prohibit the practice of pretexting (accessing private information using false pretenses). |
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