An insurer charges two Virginia applicants in the same actuarial class and with equal expectation of loss different premium rates for identical coverage, with no actuarial justification for the difference. Which unfair trade practice is this?

Why D is correct

Va. Code § 38.2-507 prohibits unfair discrimination between individuals of the same class and equal expectation of life or risk, such as charging differently priced premiums for identical coverage without actuarial justification. Rates must reflect the class, not favoritism or prejudice. The Virginia Bureau of Insurance reviews rating practices for this kind of prohibited differential.

Why the other options are wrong

• A) False advertising concerns untrue statements made to the public about policy terms or benefits; the stem involves pricing, not advertising claims.
• B) Rebating is giving something of value outside the contract as an inducement; an unexplained rate difference is a different violation.
• C) Twisting is inducing the lapse or surrender of an existing policy through misrepresentation; nothing of that kind appears here.

Memory hook

Same class, same price — favoritism is unfair discrimination.