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| Home > Statutes > Usa Arizona |
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USA Statutes : arizona
Title : Insurance
Chapter : INSURANCE INFORMATION AND PRIVACY PROTECTION
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20-2101 Scope
A. This chapter applies to insurance institutions, insurance producers or insurance
support organizations that:
1. In the case of life, health or disability insurance either:
(a) Collect, receive or maintain information in connection with insurance
transactions that pertain to natural persons who are residents of this state.
(b) Engage in insurance transactions with applicants, individuals or policyholders
who are residents of this state.
2. In the case of property or casualty insurance:
(a) Collect, receive or maintain information in connection with insurance
transactions involving policies, contracts or certificates of insurance delivered, issued
for delivery or renewed in this state.
(b) Engage in insurance transactions involving policies, contracts or certificates
of insurance delivered, issued for delivery or renewed in this state.
B. The rights granted by this chapter extend to:
1. In the case of life, health or disability insurance, the persons who are
residents of this state, including natural persons who are the subject of information
collected, received or maintained in connection with insurance transactions, and
applicants, individuals or policyholders who engage in or seek to engage in insurance
transactions.
2. In the case of property or casualty insurance, the persons, including natural
persons who are the subject of information collected, received or maintained in
connection with insurance transactions involving policies, contracts or certificates of
insurance delivered, issued for delivery or renewed in this state, and applicants,
individuals or policyholders who engage in or seek to engage in insurance transactions
involving policies, contracts or certificates of insurance delivered, issued for delivery
or renewed in this state.
C. For purposes of this section, a person is considered a resident of this state if
the person's last known mailing address, as shown in the records of the insurance
institution, insurance producer or insurance support organization, is located in this
state.
D. Notwithstanding subsections A and B, this chapter does not apply to information
collected from the public records of a governmental authority and maintained by an
insurance institution or its representatives for the purpose of insuring the title to
real property located in this state.
20-2102 Definitions
In this chapter, unless the context otherwise requires:
1. "Adverse underwriting decision" means any of the following actions involving
insurance coverage which is individually underwritten:
(a) A declination of insurance coverage.
(b) A termination of insurance coverage.
(c) Failure of an insurance producer to apply for insurance coverage with a
specific insurance institution which the insurance producer represents and which is
requested by an applicant.
(d) In the case of property or casualty insurance coverage, placement by an
insurance institution or insurance producer of a risk with a residual market mechanism,
an unauthorized insurer or an insurance institution which specializes in substandard
risks, or the charging of a higher rate on the basis of information which differs from
that which the applicant or policyholder furnished.
(e) In the case of life, health or disability insurance coverage, an offer to
insure at higher than standard rates.
(f) In the case of property or casualty insurance, assigning an applicant or
policyholder to a higher rating tier or failing to apply a premium discount or credit
based on any credit related information derived from the applicant's or policyholder's
consumer report, insurance score or lack of credit history.
Notwithstanding subdivisions (a) through (f) of this paragraph, the termination of
an individual policy form on a class or statewide basis, a declination of insurance
coverage solely because the coverage is not available on a class or statewide basis or
the rescission of a policy is not considered an adverse underwriting decision, but the
insurance institution or insurance producer responsible for its occurrence shall provide
the applicant or policyholder with the specific reasons for its occurrence.
2. "Affiliate" or "affiliated" means a person that directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control with
another person.
3. "Applicant" means any person who seeks to contract for insurance coverage other
than a person seeking group insurance that is not individually underwritten.
4. "Consumer report" means any written, oral or other communication of information
bearing on a natural person's creditworthiness, credit standing, credit capacity,
character, general reputation, personal characteristics or mode of living and which is
used or expected to be used in connection with an insurance transaction.
5. "Consumer reporting agency" means any person who does any of the following:
(a) Regularly engages, in whole or in part, in the practice of assembling or
preparing consumer reports for a monetary fee.
(b) Obtains information primarily from sources other than insurance institutions.
(c) Furnishes consumer reports to other persons.
6. "Control", including the terms "controlled by" or "under common control with",
means the possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for goods or nonmanagement
services, or otherwise, unless the power is the result of an official position with or
corporate office held by the person.
7. "Declination of insurance coverage" means a denial, in whole or in part, by an
insurance institution or insurance producer of requested insurance coverage.
8. "Individual" means any natural person who:
(a) In the case of property or casualty insurance, is a past, present or proposed
named insured or certificate holder.
(b) In the case of life, health or disability insurance, is a past, present or
proposed principal insured or certificate holder.
(c) Is a past, present or proposed policyowner.
(d) Is a past or present applicant.
(e) Is a past or present claimant.
(f) Derived, derives or is proposed to derive insurance coverage under an insurance
policy or certificate subject to this chapter.
9. "Institutional source" means any person or governmental entity that provides
information about an individual to an insurance producer, insurance institution or
insurance support organization, other than an insurance producer, the individual who is
the subject of the information or a natural person acting in a personal capacity rather
than in a business or professional capacity.
10. "Insurance institution" means any corporation, association, partnership,
reciprocal insurer, inter-insurer, Lloyd's association, fraternal benefit society or
other person engaged in the business of insurance, including health care service
organizations and hospital, medical, dental and optometric service corporations as
defined in this title. Insurance institution does not include insurance producers or
insurance support organizations.
11. "Insurance producer" means an insurance producer as defined in section 20-281 or
a managing general agent as defined in section 20-311.
12. "Insurance score" means, for the purpose of insurance underwriting or rating, a
designation that is derived by using a variety of data sources, including an individual's
consumer report in an algorithm, computer program, model or other process that reduces
the data to a number, alpha character or rating that is used for insurance underwriting
and rating decisions.
13. "Insurance support organization" means:
(a) Any person who regularly engages, in whole or in part, in the practice of
assembling or collecting information about natural persons for the primary purpose of
providing the information to an insurance institution or insurance producer for insurance
transactions, including the furnishing of consumer reports or investigative consumer
reports to an insurance institution or insurance producer for use in connection with an
insurance transaction or the collection of personal information from insurance
institutions, insurance producers or other insurance support organizations for the
purpose of detecting or preventing fraud, material misrepresentation or material
nondisclosure in connection with insurance underwriting or insurance claim activity.
(b) Notwithstanding subdivision (a) of this paragraph the following persons are not
considered insurance support organizations for purposes of this chapter:
(i) Insurance producers.
(ii) Government institutions.
(iii) Insurance institutions.
(iv) Medical care institutions.
(v) Medical professionals.
14. "Insurance transaction" means any transaction involving insurance primarily for
personal, family or household needs rather than business or professional needs and which
entails the determination of an individual's eligibility for an insurance coverage,
benefit or payment or the servicing of an insurance application, policy, contract or
certificate.
15. "Investigative consumer report" means a consumer report or portion of a consumer
report in which information about a natural person's character, general reputation,
personal characteristics or mode of living is obtained through personal interviews with
the person's neighbors, friends, associates, acquaintances or others who may have
knowledge concerning those items of information.
16. "Medical care institution" means any facility or institution that is licensed to
provide health care services to natural persons including:
(a) Health care service organizations.
(b) Home health agencies.
(c) Hospitals.
(d) Medical clinics.
(e) Public health agencies.
(f) Rehabilitation agencies.
(g) Skilled nursing facilities.
17. "Medical professional" means any person licensed or certified to provide health
care services to natural persons, including a chiropractor, clinical dietitian, clinical
psychologist, dentist, nurse, occupational therapist, optometrist, pharmacist, physical
therapist, physician, podiatrist, psychiatric social worker or speech therapist.
18. "Medical record information" means personal information which relates to an
individual's physical or mental condition, medical history or medical treatment and is
obtained from a medical professional or medical care institution, the individual or the
individual's spouse, parent or legal guardian.
19. "Personal information" means any individually identifiable information gathered
in connection with an insurance transaction and from which judgments can be made about an
individual's character, habits, avocations, finances, occupation, general reputation,
credit, health or any other personal characteristics. Personal information includes an
individual's name and address and medical record information but does not include
privileged information.
20. "Policyholder" means any person who:
(a) In the case of individual property or casualty insurance, is a present named
insured.
(b) In the case of individual life, health or disability insurance, is a present
policyowner.
(c) In the case of group insurance which is individually underwritten, is a present
group certificate holder.
21. "Pretext interview" means an interview in which a person, in an attempt to
obtain information about a natural person, performs one or more of the following acts:
(a) Pretends to be someone he or she is not.
(b) Pretends to represent a person he or she is not in fact representing.
(c) Misrepresents the true purpose of the interview.
(d) Refuses to identify himself or herself upon request.
22. "Privileged information" means any individually identifiable information that
relates to a claim for insurance benefits or a civil or criminal proceeding involving an
individual and is collected in connection with or in reasonable anticipation of a claim
for insurance benefits or a civil or criminal proceeding involving an individual, except
that information otherwise meeting the requirements of this paragraph is considered
personal information under this chapter if it is disclosed in violation of section
20-2113.
23. "Residual market mechanism" means an agreement for the equitable apportionment
among insurers of insurance afforded applicants who are in good faith entitled to but who
are unable to procure insurance through ordinary methods.
24. "Termination of insurance coverage" or "termination of an insurance policy"
means either a cancellation or nonrenewal of an insurance policy, in whole or in part,
for any reason other than the failure to pay a premium as required by the policy.
25. "Unauthorized insurer" means an insurance institution that has not been granted
a certificate of authority by the director to transact insurance in this state.
20-2103 Pretext interviews; exception
An insurance institution, insurance producer or insurance support organization shall
not use or authorize the use of pretext interviews to obtain information in connection
with an insurance transaction, except that a pretext interview may be undertaken to
obtain information from a person or institution that does not have a generally or
statutorily recognized privileged relationship with the person about whom the information
relates for the purpose of investigating a claim where, based upon specific information
available for review by the director, there is a reasonable basis for suspecting criminal
activity, fraud, material misrepresentation or material nondisclosure in connection with
the claim.
20-2104 Notice of insurance information practices
A. An insurance institution or insurance producer shall provide a notice of
information practices to applicants and policyholders in connection with insurance
transactions as prescribed in this section.
B. The insurance institution or insurance producer shall provide the notice at the
following times:
1. In the case of an application for insurance, not later than when the insurance
institution or insurance producer either:
(a) Delivers the insurance policy or certificate, if personal information is
collected only from the applicant or from public records.
(b) First collects personal information from a source other than the applicant or
public records.
2. In the case of a policy renewal, at least annually during the continuation of
the relationship with the policyholder.
3. In the case of a policy reinstatement or change in insurance benefits, not later
than the time when the insurance institution receives a request for a policy
reinstatement or change in insurance benefits except that a notice is not required if a
notice was already given within the immediately preceding twelve months.
C. The notice shall be in writing or, if the applicant or policyholder agrees, in
an electronic form and shall either contain the information required for compliance with
the notice requirements established under section 503 of the Gramm-Leach-Bliley act (15
United States Code section 6803) or shall state:
1. Whether personal information may be collected from persons other than the
individual or individuals proposed for coverage.
2. The types of personal information that may be collected and the types of sources
and investigative techniques that may be used to collect the information.
3. The types of disclosures identified in section 20-2113, paragraphs 2 through 6,
9, 11, 12 and 14 and the circumstances under which the disclosures may be made without
prior authorization, except only those circumstances need be described which occur with
such a frequency as to indicate a general business practice.
4. A description of the rights established under sections 20-2108 and 20-2109 and
the manner in which those rights may be exercised.
5. That information obtained from a report prepared by an insurance support
organization may be retained by the insurance support organization and disclosed to other
persons.
D. Instead of the notice prescribed in subsection C of this section, the insurance
institution or insurance producer may provide an abbreviated notice informing the
applicant that:
1. Personal information may be collected from persons other than the individual or
individuals proposed for coverage.
2. The information as well as other personal or privileged information subsequently
collected by the insurance institution or insurance producer may in certain circumstances
be disclosed to third parties without authorization.
3. A right of access and correction exists with respect to all personal information
collected.
4. The notice prescribed in subsection C of this section will be provided to the
applicant on request.
E. The obligations imposed by this section on an insurance institution or insurance
producer may be satisfied by another insurance institution or insurance producer
authorized to act on its behalf.
F. If an insurance institution, insurance producer or insurance support
organization that is required to give notice under this section gives the notice to the
sponsor of an employee benefit plan, a group or blanket insurance policyholder or group
annuity contract holder or a workers' compensation plan participant and does not disclose
personal information about any of the individuals described in paragraph 1, 2 or 3 of
this subsection except as otherwise allowed under section 20-2113, the insurer, producer
or insurance support organization is not required to provide the notice to:
1. A participant or a beneficiary of an employee benefit plan that the insurer
administers or sponsors or for which the insurer acts as trustee, insurer or fiduciary.
2. An individual who is covered under a group or blanket insurance policy or group
annuity contract issued by the insurer.
3. A beneficiary in a workers' compensation plan.
G. An insurance institution or insurance producer is not required to give notice
under this section to a policyholder whose policy is lapsed, expired or otherwise
inactive if the insurance institution or insurance producer has not communicated with the
policyholder for at least twelve consecutive months, other than to provide annual privacy
notices, material required by law or order of a state or federal regulatory authority or
promotional materials.
H. An insurance institution or insurance producer is not required to give notice
under this section to a policyholder whose last known address of record is invalid. An
address is deemed invalid under this subsection if mail sent to that address by the
insurance institution or insurance producer has been returned by the postal authorities
as undeliverable and if subsequent attempts by the insurance institution or insurance
producer to obtain a valid address for the individual have been unsuccessful.
20-2105 Marketing and research surveys; disclosure of questions
An insurance institution or insurance producer shall clearly specify those questions
designed to obtain information solely for marketing or research purposes from an
individual in connection with an insurance transaction.
20-2106 Content of disclosure authorization forms
Notwithstanding any other statute no insurance institution, insurance producer or
insurance support organization may utilize as its disclosure authorization form in
connection with insurance transactions a form or statement which authorizes the
disclosure of personal or privileged information about an individual to the insurance
institution, insurance producer or insurance support organization unless the form or
statement:
1. Is written in plain language.
2. Is dated.
3. Specifies the types of persons authorized to disclose information about the
individual.
4. Specifies the nature of the information authorized to be disclosed.
5. Names the insurance institution or insurance producer and identifies by generic
reference representatives of the insurance institution to whom the individual is
authorizing information to be disclosed.
6. Specifies the purposes for which the information is collected.
7. In the case of authorizations signed for the purpose of collecting information
in connection with an application for an insurance policy, a policy reinstatement or a
request for change in policy benefits, specifies the length of time the authorization
remains valid. The length of time shall be no longer than:
(a) Thirty months from the date the authorization is signed if the application or
request involves life, health or disability insurance.
(b) One year from the date the authorization is signed if the application or
request involves property or casualty insurance.
8. In the case of authorizations signed for the purpose of collecting information
in connection with a claim for benefits under an insurance policy, specifies the length
of time the authorization remains valid. The length of time shall be no longer than:
(a) The term of coverage of the policy if the claim is for a health insurance
benefit.
(b) The duration of the claim if the claim is not for a health insurance benefit.
9. Advises the individual or a person authorized to act on behalf of the individual
that the individual or the individual's authorized representative is entitled to receive
a copy of the authorization form.
20-2107 Investigative consumer reports
A. No insurance institution, insurance producer or insurance support organization
may prepare or request an investigative consumer report about an individual in connection
with an insurance transaction involving an application for insurance, a policy renewal, a
policy reinstatement or a change in insurance benefits unless the insurance institution
or insurance producer informs the individual that the individual may request to be
interviewed in connection with the preparation of the investigative consumer report and
that upon a request pursuant to section 20-2108 the individual is entitled to receive a
copy of the investigative consumer report.
B. If an investigative consumer report is to be prepared by an insurance
institution or insurance producer, the insurance institution or insurance producer shall
institute reasonable procedures to conduct a personal interview requested by an
individual.
C. If an investigative consumer report is to be prepared by an insurance support
organization, the insurance institution or insurance producer desiring the report shall
inform the insurance support organization whether a personal interview has been requested
by the individual. The insurance support organization shall institute reasonable
procedures to conduct the interview, if requested.
20-2108 Access to recorded personal information
A. If any individual, after proper identification, submits a written request to an
insurance institution, insurance producer or insurance support organization for access to
recorded personal information about the individual which is reasonably described by the
individual and which the insurance institution, insurance producer or insurance support
organization can reasonably locate and retrieve the insurance institution, insurance
producer or insurance support organization shall within thirty business days from the
date the request is received:
1. Inform the individual of the nature and substance of the recorded personal
information in writing, by telephone or by other oral communication, whichever the
insurance institution, insurance producer or insurance support organization prefers.
2. Permit the individual to see and copy, in person, the recorded personal
information pertaining to the individual or to obtain a copy of the recorded personal
information by mail, whichever the individual prefers, unless the recorded personal
information is in coded form, in which case the insurance institution, insurance producer
or insurance support organization shall provide an accurate translation in plain language
and in writing.
3. Disclose to the individual the identity, if recorded, of those persons to whom
the insurance institution, insurance producer or insurance support organization has
disclosed the personal information within two years prior to the request, and if the
identity is not recorded, the names of those insurance institutions, insurance producers,
insurance support organizations or other persons to whom the information is normally
disclosed.
4. Provide the individual with a summary of the procedures by which the individual
may request correction, amendment or deletion of recorded personal information.
B. Any personal information provided pursuant to subsection A of this section shall
identify the source of the information if the source is an institutional source.
C. Medical record information supplied by a medical care institution or medical
professional and requested under subsection A of this section, together with the identity
of the medical professional or medical care institution which provided the information,
shall be supplied either directly to the individual or to a medical professional
designated by the individual and licensed to provide medical care with respect to the
condition to which the information relates, whichever the insurance institution,
insurance producer or insurance support organization prefers. If it elects to disclose
the information to a medical professional designated by the individual, the insurance
institution, insurance producer or insurance support organization shall notify the
individual, at the time of the disclosure, that it has provided the information to the
medical professional.
D. Except for personal information provided under section 20-2109, an insurance
institution, insurance producer or insurance support organization may charge a reasonable
fee to cover the costs incurred in providing a copy of recorded personal information to
individuals.
E. The obligations imposed by this section upon an insurance institution or
insurance producer may be satisfied by another insurance institution or insurance
producer authorized to act on its behalf. With respect to the copying and disclosure of
recorded personal information pursuant to a request under subsection A of this section,
an insurance institution, insurance producer or insurance support organization may make
arrangements with an insurance support organization or a consumer reporting agency to
copy and disclose recorded personal information on its behalf.
F. The rights granted to individuals in this section extend to all natural persons
to the extent information about them is collected and maintained by an insurance
institution, insurance producer or insurance support organization in connection with an
insurance transaction. The rights granted to all natural persons by this subsection do
not extend to information about them that relates to and is collected in connection with
or in reasonable anticipation of a claim or civil or criminal proceeding involving them.
G. For the purposes of this section, "insurance support organization" does not
include a consumer reporting agency.
20-2109 Correction, amendment or deletion of recorded personal information
A. Within thirty business days from the date of receipt of a written request from
an individual to correct, amend or delete any recorded personal information about the
individual within its possession, an insurance institution, insurance producer or
insurance support organization shall either:
1. Correct, amend or delete the portion of the recorded personal information in
dispute.
2. Notify the individual of its refusal to make the correction, amendment or
deletion, the reasons for the refusal and the individual's right to file a statement as
provided in subsection C.
B. If the insurance institution, insurance producer or insurance support
organization corrects, amends or deletes recorded personal information, the insurance
institution, insurance producer or insurance support organization shall so notify the
individual in writing and furnish the correction, amendment or fact of deletion to the
following, as applicable:
1. Any person specifically designated by the individual who may have, within the
preceding two years, received the recorded personal information.
2. Any insurance support organization whose primary source of personal information
is insurance institutions if the insurance support organization has systematically
received the recorded personal information from the insurance institution within the
preceding seven years, except that the correction, amendment or fact of deletion need not
be furnished if the insurance support organization no longer maintains recorded personal
information about the individual.
3. Any insurance support organization that furnished the personal information that
has been corrected, amended or deleted.
C. If an individual disagrees with an insurance institution's, insurance producer's
or insurance support organization's refusal to correct, amend or delete recorded personal
information, the individual may file with the insurance institution, insurance producer
or insurance support organization a concise statement setting forth what the individual
thinks is the correct, relevant or fair information and a concise statement of the
reasons why the individual disagrees with the insurance institution's, insurance
producer's or insurance support organization's refusal to correct, amend or delete
recorded personal information.
D. If the individual files either statement as described in subsection C, the
insurance institution, insurance producer or support organization shall:
1. File the statement with the disputed personal information and provide a means by
which anyone reviewing the disputed personal information will be made aware of the
individual's statement and have access to it.
2. In any subsequent disclosure by the insurance institution, insurance producer or
insurance support organization of the recorded personal information that is the subject
of disagreement, clearly identify the matter in dispute and provide the individual's
statement along with the recorded personal information being disclosed.
3. Furnish the statement to the persons and in the manner prescribed in subsection
B.
E. If the individual so requests, the insurance institution shall reconsider its
underwriting decision based on any corrected information or the individual's statement
provided under subsections C and D.
F. The rights granted to individuals in this section extend to all natural persons
to the extent information about them is collected and maintained by an insurance
institution, insurance producer or insurance support organization in connection with an
insurance transaction. The rights granted to all natural persons by this section do not
extend to information about them that relates to and is collected in connection with or
in reasonable anticipation of a claim or civil or criminal proceeding involving them.
G. For purposes of this section, "insurance support organization" does not include
a consumer reporting agency. 20-2110 Reasons for adverse underwriting decisions A. In the event of an adverse underwriting decision the insurance institution or insurance producer responsible for the decision shall either provide the applicant, policyholder or individual proposed for coverage with the specific reason for the adverse underwriting decision in writing or advise the person, in writing, that upon written request the person may receive the specific reason in writing and provide the applicant, policyholder or individual proposed for coverage with a summary of the rights established under subsection B of this section and sections 20-2108 and 20-2109. B. Upon receipt of a written request within ninety business days from the date of the mailing of notice or other communication of an adverse underwriting decision to an applicant, policyholder or individual proposed for coverage, the insurance institution or insurance producer shall furnish to the person within twenty-one business days from the date of receipt of the written request: 1. The specific reason for the adverse underwriting decision, in writing, if the information was not initially furnished in writing pursuant to subsection A of this section. 2. The specific items of personal and privileged information that support those reasons except that: (a) The insurance institution or insurance producer is not required to furnish specific items of privileged information if it has a reasonable suspicion, based upon specific information available for review by the director, that the applicant, policyholder or individual proposed for coverage has engaged in criminal activity, fraud, material misrepresentation or material nondisclosure. (b) Specific items of medical record information supplied by a medical care institution or medical professional shall be disclosed either directly to the individual about whom the information relates or to a medical professional designated by the individual and licensed to provide medical care with respect to the condition to which the information relates, at the option of the insurance institution or insurance producer. 3. The names and addresses of the institutional sources that supplied the specific items of information pursuant to paragraph 2 of this subsection, except that the identity of any medical professional or medical care institution shall be disclosed either directly to the individual or to the designated medical professional, whichever the insurance institution or insurance producer prefers. C. The obligations imposed by this section upon an insurance institution or insurance producer may be satisfied by another insurance institution or insurance producer authorized to act on its behalf. D. If an adverse underwriting decision results solely from an oral request or inquiry, the explanation of the specific reasons and summary of rights required by subsection A of this section may be given orally. E. In providing the specific reason for an adverse underwriting decision based on credit related information contained or not contained in an individual's consumer report, the insurance institution or agent shall provide at least the following information: 1. That the decision was based in part on a consumer report or the absence of credit history. 2. The source of the consumer report and how the individual may obtain a copy of the consumer report. 3. A description of up to four factors that were the primary cause for the adverse action that resulted from the insurance score. F. An insurer shall not use the following types of credit history to calculate an insurance score to determine property or casualty premiums for insurance transactions that are subject to this article and shall not knowingly use an insurance score developed by a third party if the score is calculated using any of the following types of credit history: 1. The absence of credit history or the inability to determine the consumer's credit history unless the insurer's action is actuarially justified or the insurer treats the consumer as if the consumer had neutral credit information, as defined by the insurer. 2. Credit history or an insurance score based on collection accounts identified with a medical industry code. 3. A bankruptcy or a lien satisfaction that is more than seven years old. 4. The consumer's use of a particular type of credit card, charge card or debit card unless actuarially justified. 5. The consumer's total available line of credit, except that an insurer may consider the total amount of outstanding debt in relation to the total available line of credit. 6. An insurance score that is calculated using the income, gender, address, zip code, ethnic group, religion, marital status or nationality of the consumer as a factor. This section does not prohibit an insurer from using zip code, address, gender and marital status information for underwriting purposes. 20-2111 Information concerning previous adverse underwriting decisions
An insurance institution, insurance producer or insurance support organization shall
not seek information in connection with an insurance transaction concerning any previous
adverse underwriting decision experienced by an individual or any previous insurance
coverage obtained by an individual through a residual market mechanism, unless the
inquiry also requests the reasons for any previous adverse underwriting decision or the
reasons why insurance coverage was previously obtained through a residual market
mechanism.
20-2112 Previous adverse underwriting decisions
An insurance institution or insurance producer shall not base an adverse
underwriting decision in whole or in part:
1. On the fact of a previous adverse underwriting decision or the fact that an
individual previously obtained insurance coverage through a residual market mechanism,
except that an insurance institution or insurance producer may base an adverse
underwriting decision on further information obtained from an insurance institution or
insurance producer responsible for a previous adverse underwriting decision.
2. On personal information received from an insurance support organization whose
primary source of information is insurance institutions, except that an insurance
institution or insurance producer may base an adverse underwriting decision on further
personal information obtained as the result of information received from the insurance
support organization.
20-2113.01 Consumer reporting agency; sale of information obtained by insurance inquiry prohibited; exceptions
A. A consumer reporting agency shall not provide or sell data or lists that include
any information that in whole or in part was submitted in conjunction with an insurance
inquiry about a consumer's credit information or a request for a credit report or
insurance score. Such information includes the expiration dates of an insurance policy or
any other information that may identify time periods during which a consumer's insurance
may expire and the terms and conditions of the consumer's insurance coverage.
B. Subsection A does not apply to data or lists that the consumer reporting agency
supplies to the insurance producer from whom the information was received, the insurer on
whose behalf the producer acted or the insurer's affiliates or holding companies.
C. This section shall not restrict an insurer from being able to obtain a claims
history report or a motor vehicle report. 20-2113 Disclosure limitations and conditions
An insurance institution, insurance producer or insurance support organization shall
not disclose any personal or privileged information about an individual collected or
received in connection with an insurance transaction unless the disclosure is:
1. With the written authorization of the individual except that:
(a) If the authorization is submitted by another insurance institution, insurance
producer or insurance support organization, the authorization shall meet the requirements
prescribed in section 20-2106.
(b) If the authorization is submitted by a person other than an insurance
institution, insurance producer or insurance support organization, the authorization
shall be dated, signed by the individual and obtained one year or less prior to the date
a disclosure is sought pursuant to this section.
2. To a person other than an insurance institution, insurance producer or insurance
support organization, if the disclosure is reasonably necessary:
(a) To enable the person to perform a business, professional or insurance function
for the disclosing insurance institution, insurance producer or insurance support
organization and the person agrees not to disclose the information further without the
individual's written authorization unless the further disclosure either:
(i) Would otherwise be permitted by this section if made by an insurance
institution, insurance producer or insurance support organization.
(ii) Is reasonably necessary for the person to perform the individual's function
for the disclosing insurance institution, insurance producer or insurance support
organization.
(b) To enable the person to provide information to the disclosing insurance
institution, insurance producer or insurance support organization for the purpose of
determining an individual's eligibility for an insurance benefit or payment or detecting
or preventing criminal activity, fraud, material misrepresentation or material
nondisclosure in connection with an insurance transaction.
3. To an insurance institution, insurance producer, insurance support organization
or self-insurer if the information disclosed is limited to that which is reasonably
necessary to detect or prevent criminal activity, fraud, material misrepresentation or
material nondisclosure in connection with insurance transactions or for either the
disclosing or receiving insurance institution, insurance producer or insurance support
organization to perform its function in connection with an insurance transaction
involving the individual.
4. To a medical care institution or medical professional for the purpose of
verifying insurance coverage or benefits, informing an individual of a medical problem of
which the individual may not be aware or conducting an operations or service audit, if
only the information which is reasonably necessary to accomplish the purposes prescribed
by this paragraph is disclosed.
5. To an insurance regulatory authority.
6. To a law enforcement or other governmental authority to protect the interests of
the insurance institution, insurance producer or insurance support organization in
preventing or prosecuting the perpetration of fraud upon it, or if the insurance
institution, insurance producer or insurance support organization reasonably believes
that illegal activities have been conducted by the individual.
7. Otherwise permitted or required by law.
8. In response to a valid administrative or judicial order, including a search
warrant or subpoena.
9. Made for the purpose of conducting actuarial or research studies, except that no
individual may be identified in any actuarial or research report, materials allowing the
individual to be identified shall be returned or destroyed as soon as they are no longer
needed and the actuarial or research organization shall agree not to disclose the
information unless the disclosure would otherwise be permitted by this section if made by
an insurance institution, insurance producer or insurance support organization.
10. To a party or a representative of a party to a proposed or consummated sale,
transfer, merger or consolidation of all or part of the business of the insurance
institution, insurance producer or insurance support organization, except that prior to
the consummation of the sale, transfer, merger or consolidation only the information is
disclosed which is reasonably necessary to enable the recipient to make business
decisions about the purchase, transfer, merger or consolidation and the recipient agrees
not to disclose the information unless the disclosure would otherwise be permitted by
this section if made by an insurance institution, insurance producer or insurance support
organization.
11. To a person whose only use of the information will be in connection with the
marketing of a product or service if:
(a) No medical record information, privileged information or personal information
relating to an individual's character, personal habits, mode of living or general
reputation is disclosed and no classification derived from the information is disclosed.
(b) The individual has been given an opportunity to indicate that the individual
does not want personal information disclosed for marketing purposes and has given no
indication that the individual does not want the information disclosed.
(c) The person receiving the information agrees not to use it except in connection
with the marketing of a product or service.
12. To an affiliate whose only use of the information will be in connection with an
audit of the insurance institution or insurance producer or the marketing of an insurance
or financial product or service, if the affiliate agrees not to disclose the information
for any other purpose or to an unaffiliated person, except that no medical record
information may be disclosed for marketing purposes without the individual's written
consent.
13. By a consumer reporting agency if the disclosure is to a person other than an
insurance institution or insurance producer.
14. To a group insurance policyholder for the purpose of reporting claims experience
or conducting an audit of the insurance institution's or insurance producer's operations
or services if the information disclosed is reasonably necessary for the recipient to
conduct the review or audit.
15. To a professional peer review organization for the purpose of reviewing the
service or conduct of a medical care institution or medical professional.
16. To a governmental authority for the purpose of determining the individual's
eligibility for health benefits for which the governmental authority may be liable.
17. To a certificate holder or policyholder for the purpose of providing information
regarding the status of an insurance transaction.
20-2114 Director; powers
A. The director may examine and investigate the affairs of every insurance
institution or insurance producer doing business in this state to determine whether the
insurance institution or insurance producer has been or is engaged in any conduct in
violation of this chapter.
B. The director may examine and investigate the affairs of every insurance support
organization acting on behalf of an insurance institution or insurance producer which
either transacts business in this state or transacts business outside this state that has
an effect on a person residing in this state in order to determine whether the insurance
support organization has been or is engaged in any conduct in violation of this chapter.
20-2115 Service of process; insurance support organizations
For the purpose of this chapter, an insurance support organization transacting
business outside this state which has an effect on a person residing in this state is
deemed to have appointed the director to accept service of process on its behalf, if the
director causes a copy of the service to be mailed immediately by registered mail to the
insurance support organization at its last known principal place of business. The return
postcard receipt for the mailing is sufficient proof that the copy of the service was
properly mailed by the director.
20-2116 Cease and desist order and reports
If, after a hearing, the director determines that the insurance institution,
insurance producer or insurance support organization charged has engaged in conduct or
practices in violation of this chapter, the director shall put the director's findings in
writing and shall issue and cause to be served upon the insurance institution, insurance
producer or insurance support organization a copy of the findings and an order requiring
the insurance institution, insurance producer or insurance support organization to cease
and desist from the conduct or practices constituting a violation of this chapter.
20-2117 Civil penalty
A. In any case in which a hearing results in the finding of a knowing violation of
this chapter, the director may, in addition to the issuance of a cease and desist order
as prescribed in section 20-2116, order payment of a civil penalty of not more than five
hundred dollars for each violation but not to exceed ten thousand dollars in the
aggregate for multiple violations.
B. After notice and a hearing, the director may subject any person who violates a
cease and desist order of the director under section 20-2116 to one or more of the
following penalties:
1. A civil penalty of not more than ten thousand dollars for each violation.
2. A civil penalty of not more than fifty thousand dollars if the director finds
that violations have occurred with such frequency as to constitute a general business
practice.
3. Suspension or revocation of an insurance institution's or agent's license.
C. The director shall deposit all civil penalties pursuant to this section for
deposit in the state general fund.
20-2118 Individual remedies
A. If any insurance institution, insurance producer or insurance support
organization fails to comply with the rights granted under sections 20-2108 through
20-2110, any person whose rights are violated may apply to the superior court of this
state, or any other court of competent jurisdiction, for appropriate equitable relief.
B. An insurance institution, insurance producer or insurance support organization
which discloses information in violation of section 20-2113 is liable for damages
sustained by the individual about whom the information relates, except that no individual
is entitled to a monetary award which exceeds the actual damages sustained by the
individual as a result of a violation of section 20-2113.
C. In any action brought pursuant to this section, the court may award the cost of
the action and reasonable attorney fees to the prevailing party.
D. An action under this section must be brought within two years from the date the
alleged violation is or should have been discovered.
E. Except as specifically provided in this section, there is no remedy or recovery
available to individuals, in law or in equity, for a violation of this chapter.
20-2119 Immunity
No claim for relief in the nature of defamation, invasion of privacy or negligency
may arise against any person for disclosing personal or privileged information according
to this chapter nor may such a claim for relief arise against any person for furnishing
personal or privileged information according to this chapter to an insurance institution,
insurance producer or insurance support organization, except that this section provides
no immunity for disclosing or furnishing false information with malice or wilful intent
to injure any person.
20-2120 No limitation of common law right
Nothing in this article shall limit any common law right of any person.
20-2121 Enforcement of privacy provisions of Gramm Leach Bliley act A. The department may enforce title V, subtitle A of the Gramm Leach Bliley act (15 United States Code sections 6801 through 6809) related to privacy and protection of nonpublic personal information. B. The director may adopt rules pursuant to title 41, chapter 6 to carry out this section. 20-2122 Partial exemption for health insurers subject to HIPAA
A. Except as provided in subsection B of this section, if an insurance institution
is subject to and in compliance with 45 Code of Federal Regulations part 164, subparts A
and E, the insurance institution is deemed to comply with this article.
B. An insurance institution is subject to sections 20-2103, 20-2107, 20-2110,
20-2111, 20-2112, 20-2114, 20-2115, 20-2116, 20-2117, 20-2118, 20-2119, 20-2120 and
20-2121.
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