Which scenario illustrates unfair discrimination?

• A. Denying coverage for preexisting conditions
• B. Charging different premiums for policyholders in the same risk classification
• C. Excluding maternity coverage
• D. Limiting benefits for high-risk occupations

Answer: (B)

When underwriting is fair, people who present the same level of risk should be treated the same. Charging different premiums for policyholders who fall into the same risk classification breaks that principle because it applies unequal pricing to individuals who are essentially equal in risk. That kind of variability isn’t based on objective differences in risk, so it’s considered unfair discrimination.

Denying coverage for preexisting conditions is an underwriting decision tied to health history and policy terms; it’s a standard practice in some contexts, not an unequal treatment within a single risk group. Excluding maternity coverage reflects a policy limitation rather than a misapplication of the risk class. Limiting benefits for high-risk occupations aligns with the higher risk of those jobs and is a risk-based adjustment, not discrimination within the same class.