P&CIllinoismedium
For purposes of 215 ILCS 5/424, when is a rate considered "unfairly discriminatory" under Illinois law?
When premium differences between risks do not reflect actuarially justified differences in expected losses or expenses
BWhenever the rate varies between any two policyholders
CWhen the rate is lower for new customers than for existing customers
DWhen the rate does not match the advisory organization's reference filing
Why this is the answer
Under 215 ILCS 5/424, unfair discrimination occurs when an insurer charges different premiums to risks of like kind and quality without an actuarial basis tied to differences in expected losses or expenses. Lawful classification — such as territory, prior claims experience, or credit-based insurance scores where permitted — is not unfair discrimination because it reflects genuine loss cost differences. The standard applies despite open competition.
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