Health Insurance Mastery Practice Exam

What principle is violated when obtaining insurance based on race or ethnicity?

1. Risk assessment

2. Fair underwriting

3. Unlawful discrimination

4. Quality assurance

The correct answer is: Unlawful discrimination

Obtaining insurance based on race or ethnicity violates the principle of unlawful discrimination. This principle asserts that all individuals should be treated equally without regard to their race, ethnicity, or other protected characteristics when it comes to access to services, including insurance. Insurance practices are designed to assess risk based on objective factors related to the individual's circumstances, health status, and behavior rather than on inherent characteristics like race or ethnicity. When insurers use these characteristics as a basis for determining eligibility, coverage, or pricing, they engage in discrimination that undermines equity and fairness in the insurance market. While risk assessment, fair underwriting, and quality assurance are all important aspects of insurance practices, they are not the core issues when discrimination based on race or ethnicity is involved. Unlawful discrimination specifically addresses the ethical and legal obligations to treat all individuals fairly in the insurance process, ensuring that decisions are based on relevant factors rather than arbitrary characteristics.