Consumer Issues and Regulations

A written report about a consumer's character, general reputation, personal characteristics, or mode of living but are obtained through personal interviews with neighbors, friends, or associates of the consumer is a(n):

Investigative consumer report

What is the maximum civil fine for an individual or entity that violates the Fraud and False Statements Act?

$50,000 per violation

The purpose of a state life and health guaranty association is: Select one:

To make sure policyholders claims are paid when an insurer becomes insolvent

What is the purpose of the Fair Credit Reporting Act?

To regulate the way credit information is collected and used

With regard to an investigative consumer report, consumers must be informed that they have the right to request additional information about the report; such information must be provided to consumers within ____ day(s) if requested.

Five

Which of the following is generally not insured by state insurance guaranty associations?

Policies from stock insurers Policies from mutual insurers Policies from fraternal benefit societies Annuities

Who is subject to the provisions of the Fraud and False Statements Act?

State Insurance Commissioners Insurance companies Agents All of the above

The information on a person's credit report is cleared after how many years?

7

All of the following policies and contracts are typically covered by state insurance guaranty associations, EXCEPT:

A whole life insurance policy issued by a mutual insurer A term life insurance policy issued by a stock insurer An individually-owned annuity A universal life insurance policy issued by a fraternal benefit society

All of the following may not be included in a consumer report, unless the consumer credit report is requested for a life insurance policy with a face amount of $150,000 or more, EXCEPT:

Adverse information dating back more than three years

All of the following statements are true regarding the guaranty association, EXCEPT:

All life and health insurance policies are covered by the guaranty association

The purpose of the Gramm-Leach-Bliley Act is to:

Allow financial entities to merge and accommodate greater competition

Bob has a second mortgage with XYZ bank, and Shirley has one checking and two savings accounts with ABC bank. Shirley decides to cash one of her paychecks at XYZ bank because she doesn't have time to stop at her bank. Which of the following is true under the Gramm-Leach-Bliley Act?

Bob is a customer of XYZ bank and Shirley is a consumer of XYZ bank.

A person who is guilty of a fraudulent act may be subject to the following penalties:

Civil fine up to $50,000 and imprisonment up to 10 years

What is the penalty for failing to comply with disciplinary actions for violation of the Fair Credit Reporting Act?

Criminal penalty of $50,000

Which of the following correctly states the maximum penalty for a person in violation of the Fair Credit Reporting Act?

Criminal penalty up to $50,000

What governmental agency operates the Fair Credit Reporting Act?

Federal Trade Commission

According to the Fair Credit Reporting Act, consumer reports can have which of the following information?

Information concerning an individual's character

The Fair Credit Reporting Act states that generally, consumer reports cannot contain the following information, EXCEPT:

Information on an individual's character

Which of the following correctly identifies the two types of reports insurance underwriters use to obtain credit information about an applicant?

Investigative consumer reports and consumer reports

When must the two disclosures pertaining to the Gramm-Leach-Bliley Act be made?

When the customer relationship is established; and prior to disclosure of protected information

An insurer requests an investigative consumer report on an applicant. All of the following are true, EXCEPT:

The credit report includes information about the applicant's account balances.

When an insurer requests an investigative consumer report on an applicant, what is true?

The report includes information regarding the applicant's general reputation and personal characteristics.

Investigative consumer reports cannot be performed unless the consumer has been notified in writing of the report within ______ day(s) of when the report was initially requested.

Three

Consumers notifying agencies by phone can request a _____-year hold on information; however, if a request is made in writing, the hold on information is permanent unless withdrawn by the consumer.

Two

Agents must inform applicants that a credit report may be performed:

Upon application

With respect to life and health insurance guaranty associations, what are agents prohibited from doing?

Using the existence of the life and health guaranty association as an inducement to selling an insurance contract

What must a person obtain in order to reenter the insurance industry as an agent, after having been convicted of a criminal felony that involves a breach of trust, dishonest, or has violated the Fraud and False Statements Act?

Waiver

An agent is guilty of committing fraud. What must the person obtain in order to transact insurance?

Waiver of consent from the state insurance department

Jones applies for a life insurance policy. The insurer will need to view Jones' credit report to determine his credit-worthiness, and if he is a good risk to insure. When must the insurance company inform Jones of his rights under the Fair Credit Reporting Act?

When Jones completes the application