Pennsylvania Life and Health Insurance Exam Practice Question
The Fair Credit Reporting Act (FCRA) requires that insurance companies notify applicants of what?
Correct Answer: A
Rationale: The Fair Credit Reporting Act (FCRA) mandates that insurance companies inform applicants when an investigative consumer report may be generated. This ensures transparency and allows individuals to be aware of how their information is being used.
Option B is incorrect as the FCRA does not require notification about denial of coverage for any reason; it focuses on the use of consumer reports. Option C is misleading; the FCRA protects the confidentiality of medical records, preventing public disclosure without consent. Option D is also wrong; while premiums can change, the FCRA does not stipulate that insurers must notify applicants of potential increases without notice.
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