Question

All of the following are arguments in favor of using an applicant's credit record in personal lines underwriting EXCEPT?

1) It provides insight into the applicant's financial responsibility
2) It helps assess the applicant's risk of defaulting on insurance payments
3) It allows for more accurate pricing of insurance policies
4) It violates the applicant's privacy rights

Answer 1

Using an applicant's credit record provides insights into their financial responsibility, helps assess their risk of defaulting on insurance payments, and allows for more accurate pricing of insurance policies.

Step-by-step explanation:

All of the arguments listed in favor of using an applicant's credit record in personal lines underwriting are valid except for the argument that it violates the applicant's privacy rights.

Using an applicant's credit record provides insights into their financial responsibility, helps assess their risk of defaulting on insurance payments, and allows for more accurate pricing of insurance policies. However, it is important to note that privacy rights should be respected in the use of credit records and appropriate safeguards should be in place to protect sensitive information.