When must a licensee update their privacy notice?

A licensee must update their privacy notice when there are changes to policies regarding information sharing. This requirement ensures that consumers are kept informed about how their personal information is handled and what specific practices are in place regarding its use. When there are changes in the types of information being collected, how that information is shared with third parties, or alterations in the privacy practices of the licensee, it is crucial to communicate these updates to customers. This not only complies with legal requirements but also fosters trust and transparency in the relationship with clients.

The other options, such as updating only when requested by a customer, do not align with the proactive nature of privacy regulations, which mandate disclosure of changes to policies, rather than reactive communication. Updating on a fixed schedule, such as once every five years or monthly, does not reflect the dynamic nature of privacy policies, which can change whenever there are shifts in data handling practices. Therefore, the correct response highlights the importance of adjusting the privacy notice in response to internal policy changes, ensuring consumers receive accurate and timely information on how their data may be managed.