State RegulationsCO specificDifficulty 2/5
A life insurer in Aurora charges a widowed applicant a higher premium than a married applicant, even though both are of the same class with an equal expectation of life and no actuarial data supports the difference. Under C.R.S. § 10-3-1104, how is this marital-status classification treated?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
C.R.S. § 10-3-1104(1)(f) prohibits classifying individuals solely on marital status or sex unless the classification is actuarially justified or is used for family-unit design. Because the two Aurora applicants are of the same class with an equal expectation of life and no actuarial support exists, the premium difference based on marital status is unfair discrimination.
Why the other options are wrong
- B) Marital status standing alone is not a recognized rating factor without actuarial justification, so the practice is not lawful class rating.
- C) Rebating concerns giving inducements not specified in the contract, such as premium rebates, not rating differences between applicants.
- D) Coercion of debtors falls under C.R.S. § 10-3-1105 and involves loan-security insurance, not life insurance rating.
Memory hook
Widowed vs. married at equal risk? No actuarial proof, no price difference.