State RegulationsMI specificDifficulty 1/5
Michigan's unfair discrimination provision for life insurance (M.C.L. 500.2019) prohibits an insurer from discriminating between insureds who:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
M.C.L. 500.2019 of the Michigan Insurance Code makes it unlawful for a life insurer to discriminate between insureds of the same class and equal expectation of life — for example, by charging them different premiums for the same coverage. Rating differences based on genuine risk distinctions, such as age or coverage amount, are permissible; treating people who are actuarially alike differently is the prohibited conduct enforced by DIFS.
Why the other options are wrong
- A) Different coverage amounts legitimately produce different premiums, so charging more for more coverage is not discrimination between insureds of the same class and equal expectation.
- B) Age is a genuine mortality factor, so premium differences based on age reflect real risk differences rather than unlawful discrimination.
- C) Geographic distinctions used in filed rating plans rest on differing risk characteristics, not on treating actuarially equal insureds differently.
Memory hook
Same class, same risk, must be same price — that is 500.2019.