Final answer:
The state law that protects the privacy rights of insurance applicants and requires insurance companies to justify reasons for rejection is the Health Insurance Portability and Accountability Act (HIPAA). HIPAA sets standards for patient information protection and prohibits insurers from denying coverage or increasing costs based on genetic information.
Step-by-step explanation:
The state law that protects the privacy rights of applicants for insurance and requires that insurance companies justify the reasons for rejecting applicants or making other adverse underwriting decisions is the Health Insurance Portability and Accountability Act (HIPAA). HIPAA sets the standards for patient information protection and requires insurance companies to maintain strict confidentiality of patient records. It also prohibits insurers from denying coverage or increasing costs based on genetic information, and it prevents employers from using these data for hiring, firing, or promotion.