State RegulationsGA specificDifficulty 1/5
Two applicants in Georgia fall in the same underwriting class and have equal expectation of life. One applies for a $250,000 life policy and the other for a $500,000 policy from the same insurer. Under Georgia's unfair discrimination rule, may the insurer charge them different premium rates?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-6-4(b)(8)(A)(i), the prohibition on unfair discrimination in life insurance rates applies between individuals of the same class, the same policy amount, and equal expectation of life. Here the amounts of insurance differ, so one of the three equalizers is missing and actuarially sound rate differentiation between the two applicants is lawful.
Why the other options are wrong
- A) The statute does not demand identical rates for everyone in a class; differences become lawful whenever class, amount, or expectation of life is not equal.
- C) There is no advance-approval mechanism for life rate schedules; lawfulness rests on the statutory equalizers, not on a Commissioner waiver.
- D) County of residence is not a lawful basis for discrimination between applicants of the same class and expectation of life; the justification here is the differing amount of insurance.
Memory hook
Different coverage amounts break the tie — CAL-E must fully match before rates must match.