Life License Qualification Program (LLQP) Practice Exam

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Prepare for your Life License Qualification Program (LLQP) Exam. Study with flashcards and multiple choice questions, enhanced with hints and explanations. Master the content to excel in your exam!

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Which act requires insurers to disclose when an applicant's consumer or credit history is being investigated?

1970 - Fair Credit Reporting Act
1959 - Intervention by The Securities and Exchange Commission
1999 - Financial Services Modernization Act
1945 - The McCarran-Ferguson Act

The correct answer is: 1970 - Fair Credit Reporting Act

The Fair Credit Reporting Act, enacted in 1970, establishes guidelines for the collection, dissemination, and usage of consumer credit information. One of the crucial provisions of this act is that it requires insurers and other entities to inform applicants when their consumer or credit history is being investigated or considered in making underwriting decisions. This disclosure is essential to ensure transparency and protect consumers against errors in credit reporting, as well as to give them an opportunity to understand how their financial history may impact their insurance applications. The other acts listed do not specifically address the disclosure of consumer or credit history investigations. For example, the Financial Services Modernization Act primarily focused on the repeal of the Glass-Steagall Act provisions that separated commercial and investment banking. Similarly, the McCarran-Ferguson Act deals with the regulation of the insurance industry at the state level, but does not mandate disclosure related to consumer credit inquiries, and the Intervention by The Securities and Exchange Commission relates to securities regulation rather than credit reporting.