Completing the Application, Underwriting, Delivering Policies, Contract Law
A consumer report plays a small part in an insurer's decision to charge a higher life premium. What does the FCRA require?
Answer and explanation
Answer: A. An adverse-action notice is required when consumer-report information played any part in a denial, rate increase, termination, or other unfavorable insurance decision, even if it was not the primary reason.Source: Federal Trade Commission — Consumer Reports: What Insurers Need to Know — Adverse Action Notice; insurance examples
More completing the application, underwriting, delivering policies, contract law questions
- A corporation is applying to own a life insurance policy. Which signature best evidences a competent party acting on behalf of the corporation?
- A delivered policy has a higher premium because underwriting classified the insured for a risky occupation. Which explanation is appropriate?
- A health provider receives a valid HIPAA authorization directing disclosure of specified records to a life insurer for underwriting. How does HIPAA's minimum-necessary standard apply to that authorized disclosure?
- A legal-age Texas applicant buys insurance on her own life and names a charitable corporation as beneficiary in writing on the application. Which statement is accurate?
- A life application authorizes the insurer to obtain information from a third-party provider but does not describe the information or provider type. What is missing?
- A life insurance policyowner may stop paying premiums at any time without legal penalty, but the insurer is legally bound to pay the death benefit if the insured dies while the policy is in force. This situation best illustrates which legal characteristic of an insurance contract?
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