Discrimination in insurance practice is illegal when:

• A. Discrimination between individuals in the same class of insureds when setting rates or renewing coverage is unfair and prohibited.
• B. Discrimination based on race or gender is allowed.
• C. All discrimination is prohibited.
• D. Discrimination is allowed if court approves.

Answer: (A)

The key idea is that insurance pricing must be based on actuarial risk across defined groups, and within a given group (a class) everyone who shares that class should be treated the same. It’s illegal to set different rates or renewal terms for individuals who fall into the same risk class simply because of personal characteristics. This prevents unfair treatment and aligns with anti-discrimination laws. Insurers can differentiate between different classes only when those differences reflect legitimate risk factors. Discrimination based on protected attributes like race or gender isn’t allowed, and court approval isn’t a standard remedy to permit unfair intra-class pricing.