What practice is illegal in the issuance and rating of insurance based on characteristics like age or creed?

The practice that is illegal in the issuance and rating of insurance based on characteristics like age or creed is unfair discrimination. This concept is rooted in the principle that insurance companies should not base their underwriting and pricing decisions on characteristics that are unrelated to an individual's actual risk.

Unfair discrimination refers specifically to the practice of treating individuals differently based on arbitrary factors such as age, gender, race, creed, or other protected statuses. For example, if an insurance company were to charge higher premiums or deny coverage to individuals simply because of their age or religious beliefs, it would be engaging in unfair discrimination, which is prohibited by law.

This principle protects consumers from being unfairly treated and ensures that insurance is more equitable and accessible. It promotes fairness in the insurance market, allowing individuals to receive coverage based on relevant risk factors rather than personal characteristics that do not have a bearing on the likelihood of claims. This is why identifying and addressing unfair discrimination is crucial in both ethical and legal contexts in the insurance industry.