South Carolina Personal Lines Practice Exam

How many disclosures must an insurer provide an insured according to the Gramm-Leach-Bliley Act?

1. One

2. Two

3. Three

4. Four

The correct answer is: Three

The Gramm-Leach-Bliley Act (GLBA) mandates that insurers provide their customers with a specific set of disclosures regarding their privacy policies and practices. There are typically three main disclosures required under this act. The first disclosure must be provided at the time of establishing the consumer relationship, which includes details on the types of information collected and how it is shared. The second disclosure is provided at the time of the customer's request for the information or whenever changes occur to the privacy policy. Finally, an annual privacy notice is required, which keeps the customer informed of the company's ongoing policies regarding the sharing of personal information. These multiple disclosures are designed to enhance consumer awareness and understanding of how their personal information is used and safeguarded by financial institutions, including insurance companies. Thus, the requirement for three disclosures aligns with the intent of the GLBA to promote transparency and accountability in handling personal financial information.