No. 35220 (5-year Review): Rule R590-210. Privacy of Consumer Information Exemption for Manufacturer Warranties and Service Contracts

DAR File No.: 35220
Filed: 09/01/2011 04:42:19 PM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsections 31A-2-201(2), 31A-2-202(2), and (3)(a) empower the commissioner to administer and enforce Title 31A, which in this case specifically refers to the following Title 31A sections. Subsection 31A-23-317(3) authorizes the commissioner to adopt rules implementing the requirements of Title V, Sections 501 to 505 of the federal act (15 U.S.C 6801 through 6807). Title V, Section 505 (15 U.S.C. 6805) empowers the commissioner to enforce Subtitle A of Title V of the Gramm-Leach-Bliley Act of 1999 (15 U.S.C. 6801 - 6820). As allowed by the federal law, the rule provides an exemption to warranty and service contract providers from the department's privacy rule, Rule R590-206, which sets restrictions on the disclosure of nonpublic personal health and financial information, as well as requires licensees to disclose their privacy policies to customers.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

There have been no changes in the rule in the past five years and no written comments have been received by the department in that period of time.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

Rule R590-210 is applicable to licensees of the department. Persons or entities that provide warranty or service contracts on consumer goods are required to register with the department and provide certain information about their ability to perform under the warranty or service contract. Technically a registration could be considered a license issued by the department. Unless those contracts are exempted from the rule, the provider must comply with Rule R590-210. Without the exemption, the persons or entities providing the warranties or service contracts will experience immediate and substantial costs to be in compliance with Rule R590-210. Without the exemption, they will either be out of compliance or will have to stop providing the product or provide the product subject to being in violation of the rule. The impact to the public is immediate and perilous. It will impact the delivery of these products in interstate commerce and will result in increased costs to purchasers. It will impact the supply of these products in the market. Warranty and service contract providers are not subject to Gramm-Leach-Bliley. However, because they are required to register with the department, they can be technically considered to be "licensees" of the department and without exemption would be subject to Rule R590-210, which applies only to financial services entities under Gramm-Leach Bliley. Therefore, this rule should be continued.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Authorized by:

Jilene Whitby, Information Specialist

Effective:

09/01/2011

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