If a rate filing is discriminatory, what is the regulator's likely action?

• A. Approve as is
• B. Reject or require modification
• C. Increase the requested premium unilaterally
• D. Ignore the issue

Answer: (B)

Discriminatory rate filings violate the rule that rates must be fair and based on risk, not on improper or arbitrary attributes. When a filing shows rates that treat insureds differently in a way that isn’t actuarially justified or legally allowed, the regulator won’t approve it as is. Instead, they will reject the filing or require the insurer to modify it so that the rating factors are non-discriminatory and properly supported by actuarial data. The goal is to protect consumers from unfair pricing and to ensure rates reflect actual risk, not biased or prohibited distinctions. Increasing premiums unilaterally or ignoring the issue would run counter to those duties, so the regulator’s typical action is to require changes or deny the filing until it meets standards.