Chapter 9

Which of the following statements regarding the Fair Credit Reporting Act (FCRA) is CORRECT?

Applicants must be notified within a short period of time that their credit report has been requested.

An applicant, in good health, completed the application without the premium. Upon delivery of the policy the agent noticed the applicant's health had changed. The agent is to do which of the following?

return the policy to the insurance company

Generally, the party who delivers the insurance policy to the new policy owner is the

sales agent

Underwriting is a process of

selection, classification and rating of risks

Which of the following statements about the Fair Credit Reporting Act is CORRECT?

It provides that consumers have the right to question reports made about them by investigating agencies.

If the insurance company requests an inspection report, which of the following would require notice to be given to the applicant?

The Fair Credit Reporting Act

Which of the following statements pertaining to the Medical Information Bureau (MIB) is CORRECT?

The MIB provides assistance in the underwriting of life insurance

If an application is missing answers to certain questions and the policy is issued, the company can take which course of action?

The company may rescind the policy

If a medical report is required on an applicant, it is completed by

a paramedic or examining physician

All of the following statements about the classification of applicants are correct EXCEPT

a substandard applicant can never be rejected outright by the insurer

Elaine signs an application for a $50,000 non medical life policy, pays the first premium and receives a conditional insurability receipt. If Elaine were killed in an auto accident two days later

her beneficiary would receive $50,000, if Elaine qualified for the policy as applied for

Which of the following statements pertaining to a life insurance policy application is CORRECT?

The names of both the insured and the beneficiary are indicated on the application.

The primary distinction between the insurability and approval types of conditional receipts is when the

coverage goes into effect