FX exam 2023 with 100% correct answers

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? - correct answer Aleatory: an aleatory contract means unequal amounts are exchanged between payments and benefits What is the Federal Credit Reporting Act? - correct answer Establishes procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used. Also protects consumers against the circulation of inaccurate or obsolete personal or financial information What are consumer reports? - correct answer Written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports and other public sources What is an investigative consumer report? - correct answer Also provide information on the consumer's character, reputation, and habits, but obtained through an investigation and interviews. A reporting agency conducts an investigation and interviews associated, friends and neighbors of the consumer. These reports can't be made unless the consumer is advised within 3 days of the report request What happens if someone knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses? - correct answer They are not complying with the Fair Credit Reporting Act and may be fined and/or imprisoned for up to 2 years What happens if someone unknowingly violates the Fair Credit Reporting Act? - correct answer They become liable in the amount equal to the loss to the consumer as well as any reasonable attorney fees incurred in the process What happens when someone willfully violates the Act enough to constitute a general pattern or business practice? - correct answer They are subject to a penalty of up to $2,500 What rights does a consumer have if an insurance policy is declined or modified because of information contained in either consumer report? - correct answer Must be advised and provided with the name and address of the reporting agency Has the right to know what was in the report Has the right to know the identity of anyone who received a copy of the report during the past year. Has the right to challenge any information in the report and the agency is required to reinvestigate and amend the report. If the report is found to be wrong, it must be corrected and sent out to all parties that have received a report in 2 years. What is MIB? - correct answer The Medical Information Bureau (MIB) A membership corportation owned by member insurance companies. It's a nonprofit trade organization which receives medical information from insurance companies and maintains confidential information on individuals. It is only used as a way to compare the information you have with other insurance companies and see where you need to look into more. A policy cannot be denied solely because of these reports What is HIPAA? - correct answer The Health Insurance Portability and Accountability Act A federal law that protects health information. Provide protection for the privacy of certain individually identifiable health information What are preferred risks? - correct answer A risk classification used when determining how much risk a consumer is and how much their premium should be Preferred risks are individuals who meet certain requirements and qualify for lower premiums than the standard risk. They have superior physical condition, lifestyle, and habits What are standard risks? - correct answer A risk classification used when determining how much risk a consumer is and how much their premium should be Standard risks are entitled to insurance protection without extr rating or special restrictions. They are representative o