P&CGeorgiamedium
A Georgia personal auto insurer files a rule charging a 15% surcharge solely because the applicant lives in a ZIP code with a high percentage of minority residents. Under O.C.G.A. § 33-9-4, this filing is most likely:
AApproved because territorial rating is actuarially permitted
BApproved if loss data is filed alongside it
CSubject only to advisory rejection, not formal disapproval
Disapproved as unfairly discriminatory
Why this is the answer
O.C.G.A. § 33-9-4 prohibits rates that discriminate unfairly among risks of substantially the same hazard. Territorial rating is permitted, but only if the rate differential reflects actuarially supported differences in expected loss (frequency, severity, theft, weather). A surcharge whose stated rationale is the demographic composition of a ZIP code rather than loss experience is not actuarially justified and is unfairly discriminatory, even if the ZIP-code rating tool itself is generally lawful. The Commissioner would disapprove such a filing.
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