State RegulationsGA specificDifficulty 1/5
Under Georgia's unfair trade practices law, when may an insurer charge different premiums to different individuals for life insurance without committing unfair discrimination?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
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), unfair discrimination in life insurance means making or permitting rates or terms that differ between individuals except where they are of the same class, are insured for the same amount, and have an equal expectation of life. Only rate differences justified by these class-and-expectation factors are lawful; arbitrary differences expose the insurer to enforcement action by the Insurance Commissioner.
Why the other options are wrong
- A) No statute lets the Commissioner pre-approve discriminatory rate differences; the class, amount, and equal-expectation standard, not administrative approval, controls under O.C.G.A. § 33-6-4(b)(8)(A).
- C) National origin is never a lawful rating factor; discrimination based on race, color, or national origin is prohibited in any insurance under O.C.G.A. § 33-6-4(b)(8)(A).
- D) Producer commission arrangements are irrelevant to the insured's rate; differing rates for the same class, amount, and expectation of life still constitute unfair discrimination under O.C.G.A. § 33-6-4(b)(8)(A).
Memory hook
Life rates may differ only when Class, Amount, and Life Expectation match — remember 'CAL-E'.