New York State Life Insurance Exam Questions Practice Question
A reason for using consumer reporting agencies to gather information about insurance applicants is to obtain
Correct Answer: C
Rationale: Using consumer reporting agencies provides insurers with objective information about applicants from an impartial source, ensuring that the data is reliable and unbiased. This is crucial for making informed underwriting decisions.
Option A is incorrect because policy loans are based on the insured's existing policy, not on external applicant information. Option B is misleading; while replacement policies might be relevant, consumer reports primarily focus on applicant history, not policy specifics. Option D misrepresents the nature of consumer reports; while some information may be publicly accessible, the key advantage of these reports lies in their objective assessment rather than fee-based access.
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