DFS reviews a filed homeowners rate in NY and finds that the insurer charges identical premiums to two insureds whose risk characteristics differ materially in ways the actuarial data show should produce different premiums. Which standard under NY Ins. Law § 2303 has the insurer most likely violated?

Why this is the answer

NY Ins. Law § 2303 codifies three rate standards: not excessive, not inadequate, and not unfairly discriminatory. 'Unfair discrimination' has a technical meaning here — it means treating materially different risks as if they were the same (or vice versa). The opposite of common discrimination law: charging different rates for actuarially identical risks is the violation; charging different rates for actuarially different risks is required. Failure to differentiate where the data justifies it produces cross-subsidization and is independently actionable by DFS.