Pennsylvania Life and Health Insurance Exam Practice Question
What law do all insurers and their producers need to comply with in regards to information being obtained from a third party concerning the applicant?
Correct Answer: A
Rationale: The Fair Credit Reporting Act (FCRA) mandates that insurers and their producers must follow specific guidelines when obtaining information from third parties about applicants. This law ensures consumer rights by requiring insurers to inform applicants when information is gathered from credit reports and allows applicants to dispute inaccuracies.
The McCarran-Ferguson Act primarily addresses the regulation of the insurance industry by states, not information gathering. The Nonadmitted and Reinsurance Reform Act focuses on surplus lines and reinsurance, which is unrelated to applicant information. Lastly, the Unfair Insurance Practices Act deals with unfair methods of competition and practices, rather than the protocols for obtaining third-party information.
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