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When Sander heard that a competitor had said negative things about him, Sander retaliated by
telling others that his competitor was a liar and a cheat. When a coworker questioned his
#6. behavior, Sander replied that he was just fighting fire with fire. Sander is guilty of

a) Perjury.

b) Rationalizing.

c) Twisting.

d) Embezzlement.

To make ourselves more comfortable with our actions, we often revert to rationalizations.

In comparison to consumer reports, which of the following describes a unique characteristic of

#11. investigative consumer reports?

a) The customer has no knowledge of this action.

b) The customer's associates, friends, and neighbors provide the report's data.

c) They provide additional information from an outside source about a particular risk.

d) They provide information about a customer's character and reputation.

Both consumer reports and investigative consumer reports provide additional information from
an outside source about a customer's character and reputation, and both types of reports are
used under the Fair Credit Reporting Act. The main difference is that the information for
investigative consumer reports is obtained through an investigation and interviews with
associates, friends, and neighbors of the consumer.

All else being equal, which of the following will NOT be considered unfair discrimination by
#15. insurers?
a) Cancelling individual coverage based on the insured’s marital status

b) Charging applicants with similar health histories different premium rates

c) Assigning different risk classifications to applicants based on their ethnicities

d) Discriminating in benefits and coverages based on the insured’s habits and lifestyle

Discriminating between individuals of the same class with equal life expectancies, or by reason
of race, nationality, or ethnic group would be considered unfair discrimination. Insurers are also
not allowed to cancel individual coverage due to a change in marital status. Discriminating in
benefits based on the insured's habits and lifestyle (such as smoking or dangerous hobbies) is
acceptable.

Under the Fair Credit Reporting Act, if the consumer challenges the correctness of the
#16. information contained in his/her report, the reporting agency must

a) Send an actual certified copy of the entire report to the consumer.

b) Respond to the consumer's complaint.

c) Defend the report if the agency feels it is accurate.

d) Change the report.

The consumer has the right to request the information on the report, the reasons for turndown
and any adverse underwriting decisions. The reporting agency is required to respond to the
consumer's complaint and to reinvestigate the report if necessary.

#22. Actions that are NOT specified as illegal are

a) Ethical.

b) Unethical.

c) Possibly either ethical or unethical.

d) Ethical only if they are included in the NAIC's Code of Ethics.

Illegal actions are always unethical. Actions not specifically designated as illegal may be ethical
or unethical.

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting
#25. Act?

a) $100 per violation

b) $1,000

c) $2,500

d) $5,000

An individual who willfully violates this act enough to constitute a general pattern or business
practice will be subject to a penalty of up to $2,500.