State RegulationsGA specificDifficulty 2/5
A Georgia life insurer sets its premium rates for individual policies. Under Georgia's unfair discrimination rules, what standard must the insurer follow?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under O.C.G.A. § 33-6-4(b)(8)(A), life insurance rates may not discriminate between insureds of the same class and equal expectation of life; classification must rest on sound underwriting factors, not arbitrary distinctions. Accident and sickness insurance uses a parallel but distinct standard — the same class and essentially the same hazard — so quoting the hazard standard for a life question mixes the two regimes.
Why the other options are wrong
- A) Individual discretion is exactly what the unfair discrimination rule forbids; rates must be consistent within a class. O.C.G.A. § 33-6-4(b)(8)(A).
- B) Which agent sold the policy is irrelevant; insureds of the same class and equal expectation of life pay the same premium. O.C.G.A. § 33-6-4(b)(8)(A).
- D) The 'essentially the same hazard' formulation is the accident and sickness standard; life insurance keys on class, amount, and equal expectation of life. O.C.G.A. § 33-6-4(b)(8)(A).
Memory hook
Life keys on equal expectation of life; A&S keys on equal hazard.