Question

Which rating factors are used to ensure that insurance rates are not unfairly discriminatory?

a.

Similarity of risks

b.

Policy type and quality

c.

Loss payments and expenses

d.

Both a and b

Posted under IC38 Life Insurance Agent Exam

Answer: (d).Both a and b Explanation:Insurance rates are designed to be fair and not unfairly discriminatory. This is achieved by considering factors such as the similarity of risks (similar types of risks should be treated similarly) and the quality of the policy (ensuring that the policy type and quality are taken into account in rate-setting to avoid unfair discrimination). Age and gender, while important, may not be directly related to the concept of fair rating.

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Q. Which rating factors are used to ensure that insurance rates are not unfairly discriminatory?
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