Texas General Lines — Property and CasualtyTexas Laws and RegulationsEasy
A Texas resident is applying for an auto insurance policy. The insurer inquires about the applicant's prior claims history and driving record. Which of the following privacy regulations primarily governs how insurers collect, use, and protect consumers' nonpublic personal financial information, including such details?
- AHealth Insurance Portability and Accountability Act (HIPAA)
- BFair Credit Reporting Act (FCRA)
- CFederal Trade Commission (FTC) Act
- DGramm-Leach-Bliley Act (GLBA)
Show answer & explanationAnswer & explanation
Correct answer: D. Gramm-Leach-Bliley Act (GLBA)
The Gramm-Leach-Bliley Act (GLBA) primarily governs the collection, use, and protection of consumers' nonpublic personal financial information by financial institutions, including insurance companies.
Why the other options are wrong
- A. HIPAA focuses on the privacy of health information.
- B. FCRA primarily regulates the collection and use of consumer credit information.
- C. The FTC Act broadly prohibits unfair methods of competition and unfair or deceptive acts or practices, but GLBA is more specific to financial privacy.
Gramm-Leach-Bliley Act (GLBA)
A federal law that requires financial institutions, including insurance companies, to explain their information-sharing practices to their customers and to safeguard sensitive data.
- Protects nonpublic personal financial information.
- Requires privacy notices to consumers.
- Mandates security measures for data protection.
Memory trick: GLBA guards financial data, HIPAA health, FCRA credit, FTC fair trade.