IBC.Code

Question 1

Identify IBC’s guidelines on the use of credit information (10)

Exam question was: Briefly describe four principles in gathering consent to collect and use credit information

Or: Describe four aspects the insurer needs to consider before adopting the use of credit scores

Answer 1

1. LAWS: comply with all federal/provincial laws & regulation
2. ACCURACY: credit info should be up-to-date & accurate
3. CONSENT: require informed/deemed consent
4. PRIVACY: take reasonable steps to address privacy concerns
5. CANNOT: quote/deny/cancel insurance based solely on credit
6. DOUBLE-COUNTING: forbidden - ensure that credit score is only used once in rating procedure
7. COMPLAINTS: must be handled by insurer in accordance with federal (Financial Consumer Agency of Canada) and provincial law
8. ADVERSE ACTION: insurer must inform insured of adverse action due to credit score
9. NO REFUSAL: insurer can’t refuse to quote/renew if insured doesn’t give credit score consent
10. APPEAL: Insured can appeal negative action due to credit score IF caused by an extraordinary life event

Question 2

Discuss requirements for a credit-score consent request for personal insurance

Answer 2

• Need authorization from the customer to access the credit information
• Explain what info will be collected
• Explain how the info will be used
• State the consent use period (dates)
• Notify customer that they have a right to withdraw consent (but note that this may lead to suboptimal price for them)