Tennessee Insurance Exam 2025 – 400 Free Practice Questions to Pass the Exam

The Fair Credit Reporting Act (FCRA) contains provisions that require insurers to inform consumers about the possibility of obtaining consumer reports as part of their underwriting process. This requirement is intended to promote transparency and provide consumers with awareness that their credit information is being used to assess their eligibility for insurance coverage or premiums.

Insurers are obligated to give notice to applicants or policyholders about how their credit history may affect their insurance premiums or eligibility. This is crucial because consumers have the right to know how their personal information is utilized and the potential implications it may have on their ability to acquire insurance. The act enhances consumer protection by ensuring that individuals are not caught off guard by the use of their credit information without their knowledge.

In contrast, the other options do not align with the requirements of the FCRA. Insurers are permitted to obtain consumer reports, must not hide information regarding reports, and are not mandated to destroy all reports after use, as they may need to retain them for record-keeping or legal purposes.