South Carolina Insurance Department Amends Privacy Regulations

The South Carolina Department of Insurance recently amended its Privacy of Consumer Financial and Health Information provisions (Regulation 69-58) to eliminate the annual privacy notice requirements for financial institutions under certain circumstances, to prohibit unfair discrimination against consumers for opting out, and to include the federal model privacy forms along with the related instructions.  The amendments to Regulation 69-58 comply with the changes made to the annual notice requirements of Title V of the Gramm-Leach-Bliley Act (“GLBA”) included in the Fixing America’s Surface Transportation Act (“FAST Act”) and comport with the National Association of Insurance Commissioners (“NAIC”) model law and regulation.

Under Title V of the GLBA, financial institutions generally must provide their customers with (1) an initial privacy notice at the time of establishing a customer relationship, and (2) annual notices thereafter.  The FAST Act eliminates this annual notice requirement for financial institutions that satisfy two conditions: (1) the financial institution does not share nonpublic personal information (“NPI”) with nonaffiliated parties except pursuant to certain exceptions, and (2) the financial institution has not changed its privacy policy and procedures since the most recent privacy notice sent to consumers.  Accordingly, a financial institution otherwise meeting these requirements would only be required to provide an annual notice if it changes its privacy policies or discloses NPI to nonaffiliated third parties in a manner outside of the permitted exceptions.

The amendment also includes nondiscrimination provisions that prohibit unfair discrimination against any consumer or customer who opts out from the disclosure of his or her NPI.  In addition, the federal model privacy forms with the related instructions are added as Appendix B to provide a safe harbor and to aid in compliance with the privacy law.

Regulation 69-58 is updated to comport with the most recent NAIC model regulation which implements Title V of the GLBA and incorporates these amendments.

The effective date of Regulation 69-58 is the date the final regulation is published in the South Carolina State Register.  The final regulation was published on January 26, 2018, and is available in the PDF document located here.