Page "Insurance" Paragraph 210
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Wikipedia
An insurance underwriter's job is to evaluate a given risk as to the likelihood that a loss will occur.
Thus, " discrimination " against ( i. e., negative differential treatment of ) potential insureds in the risk evaluation and premium-setting process is a necessary by-product of the fundamentals of insurance underwriting.
For instance, insurers charge older people significantly higher premiums than they charge younger people for term life insurance.
Older people are thus treated differently than younger people ( i. e., a distinction is made, discrimination occurs ).
The rationale for the differential treatment goes to the heart of the risk a life insurer takes: Old people are likely to die sooner than young people, so the risk of loss ( the insured's death ) is greater in any given period of time and therefore the risk premium must be higher to cover the greater risk.
However, treating insureds differently when there is no actuarially sound reason for doing so is unlawful discrimination.
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