State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
Under California law, an insurer may NOT refuse to issue a life insurance policy or charge a different premium based on the applicant's:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
California law prohibits unfair discrimination in insurance based on race, color, religion, national origin, or ancestry. Underwriting classifications must be based on legitimate risk factors that are statistically related to loss, such as health, age, and tobacco use. Basing rates or eligibility on race or national origin is unlawful discrimination and is subject to enforcement by the Commissioner. The prohibition protects applicants from arbitrary treatment that has no relationship to the actual risk they present.
Why the other options are wrong
- A) Tobacco use is a legitimate underwriting factor and can affect premium because it is statistically related to mortality. Tobacco use is statistically linked to mortality, so it is a lawful rating factor for life insurance.
- B) Health history is a valid risk classification factor used in underwriting life insurance. Health history directly affects expected mortality and is a standard classification factor in underwriting.
- D) The amount of coverage requested can influence underwriting requirements, such as the medical exams needed, but it is not a prohibited basis. The amount applied for can change underwriting requirements, such as exam needs, but it is not a prohibited basis.
Memory hook
Race is never a rate factor. Legitimate risk, yes; immutable status, never.