An initial privacy notice is NOT required to be provided to which of the following?

• A. A prospective customer
• B. A prospective policyholder's financial adviser
• C. A current policyholder
• D. A regulatory agency

Answer: (A)

Initial privacy notices are given when a financial institution has an ongoing customer relationship and will regularly share information about that relationship. A prospective customer has not yet entered into such a relationship, so there’s no requirement to send an initial privacy notice before the policy or account is opened. In contrast, a current policyholder is a customer and must receive the notice, and while regulators aren’t customers who receive a privacy notice, disclosures to them are governed by law. An adviser who isn’t the customer isn’t the one entitled to the notice by default—the notice speaks to the customer and explains how information may be shared with third parties, who can act on the customer’s behalf if permitted. Therefore, the initial privacy notice is not required to be provided to a prospective customer.