P&CMImedium
Under MCL 500.2403, a rate is 'unfairly discriminatory' when:
ADifferent premiums are charged to risks whose expected losses genuinely differ based on actuarially supported classification factors
BDiscounts are offered for installing safety equipment
CAn insurer cancels a policy for non-payment of premium
Risks of substantially the same expected loss and expense are charged different rates without an actuarial basis
Why this is the answer
MCL 500.2403's 'unfairly discriminatory' prong addresses classification, not the act of differentiating per se. Charging different premiums when expected losses genuinely differ is lawful 'fair discrimination.' Safety discounts and non-payment cancellations are not rate discrimination at all. The violation occurs when similar risks are treated differently without actuarial support.
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