Final answer:
The Insurance Information and Privacy Protection Act establishes the requirement to notify an applicant if their insurance application is being investigated into their personal character and mode of living.
Step-by-step explanation:
The requirement that an applicant must be notified if an insurance application is being investigated into their personal character and mode of living is established by the Insurance Information and Privacy Protection Act. This act protects the privacy of individuals by requiring insurance companies to notify applicants when their personal information is being investigated. It ensures transparency and allows individuals to be aware of any investigations that may affect their insurance application.