Arizona Life and Health Practice Exam

What is required when an insurer collects personal information from sources other than public records or the applicant in Arizona?

1. A notice of application practices must be given

2. The insurer must seek written consent

3. A background check must be conducted

4. The application must be filed with the state

The correct answer is: A notice of application practices must be given

When an insurer collects personal information from sources other than public records or the applicant, Arizona law requires that a notice of application practices be provided to the applicant. This notice serves to inform the individual about the specific types of personal information being collected, the sources from which this information is obtained, and how it will be used. The requirement for a notice ensures transparency in the insurance process, allowing applicants to be aware of how their personal data is handled, thus promoting trust and compliance with privacy norms. It empowers applicants to make informed decisions regarding their insurance applications. Providing this notice is a fundamental part of the insurer's obligation under Arizona's regulatory framework, which aims to protect consumer rights in the context of insurance transactions. The other options do not align with the specific legal requirements in Arizona for this situation. For instance, seeking written consent typically relates to different circumstances around the use of information rather than the provision of notice when collecting information. Therefore, the obligation to give a notice of application practices is the correct and necessary action in this context.