What would be considered as unfair discrimination according to insurance laws?

Charging differing premiums based on credit scores is considered unfair discrimination according to insurance laws when such practices do not reflect the individual's risk profile or ability to pay. Insurance regulations often require that premium pricing be based on factors that are directly related to the risk associated with insuring an individual. While credit scores can sometimes correlate with risk, using them as a primary basis for determining premiums can lead to unfair treatment of individuals who may be financially responsible but have lower credit ratings for reasons unrelated to their insurable risk.

In contrast, adjusting rates based on geographical risk is typically justified as it reflects the varying risk levels associated with different areas, and this practice is generally accepted by regulatory bodies. Providing equal benefits for all applicants is aligned with principles of fairness and non-discrimination, as it ensures that everyone receives the same level of protection. Assessing claims based on industry standards is also considered fair and necessary to determine the legitimacy and appropriate handling of claims without bias. Thus, the use of credit scores in determining premium rates can create disparities that do not accurately represent the true risk posed by an individual, which constitutes unfair discrimination.