State RegulationsAZ specificDifficulty 3/5
A licensed Arizona producer orders consumer reports through a consumer reporting agency. Which use is PERMISSIBLE under the federal Fair Credit Reporting Act?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
The federal Fair Credit Reporting Act (15 USC 1681) permits a consumer report to be furnished only for a permissible purpose, and underwriting an application for insurance is a core permissible purpose. The producer may obtain and use the report for that application, subject to the Act's disclosure requirements.
Why the other options are wrong
- A) Personal curiosity about a rival is not a permissible purpose under the Act.
- B) Furnishing a report to a marketing list broker is outside the underwriting purpose and violates the Act's limits on use.
- C) There is no permissible purpose when the person has applied for nothing and no underwriting decision is pending.
Memory hook
Reports ride with applications — underwriting is the permissible purpose.