State RegulationsAZ specificDifficulty 2/5
An Arizona insurer declines a life application partly on information in a consumer report. Under the Fair Credit Reporting Act, the insurer must:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under the Fair Credit Reporting Act, 15 USC 1681-1681d, a user of a consumer report that takes adverse action, such as declining or rating up an application, must give the applicant a notice identifying the consumer reporting agency, so the consumer can obtain the report and dispute inaccurate information. This keeps underwriting decisions transparent and lets applicants correct errors that follow them.
Why the other options are wrong
- A) the statute requires an adverse action notice, not delivery of the report itself.
- B) the Act requires notice to the applicant; there is no DIFI pre-use notification requirement.
- D) the insurer need not destroy the report; the duty is to give the notice identifying the agency.
Memory hook
Decline on a report? Tell them who reported.