State RegulationsFL specificDifficulty 1/5
A Florida insurer refuses to accept an application for health coverage solely because of the applicant's race. Under Florida's unfair trade practices law, what is this practice called?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Chapter 626, Florida Statutes, unfair discrimination occurs when an insurer or agent refuses to insure, refuses to continue to insure, or limits the amount of coverage based on race, color, creed, ethnic origin, or other prohibited classification. Charging different rates or refusing coverage on such grounds is an unfair trade practice enforceable by the Department of Financial Services. Legitimate underwriting classifications that are actuarially supported remain permissible, but race can never be one of them.
Why the other options are wrong
- B) Defamation involves false statements that injure another's business; it is not the refusal to insure based on a protected characteristic.
- C) Coercion involves force or threats to compel a transaction, not discriminatory refusal of coverage.
- D) Rebating involves offering unlawful inducements to purchase, not refusing coverage based on race.
Memory hook
Insurance risk, not race — discrimination is always unfair.