Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination?

Charging the insured higher premiums based on her race is an example of discrimination and constitutes an unfair trade practice in the insurance industry. Discrimination in this context refers to the unjust or prejudicial treatment of different categories of people, particularly in matters related to pricing and access to insurance products. Insurers are required to base their pricing on objective risk factors rather than personal characteristics that are unrelated to risk, such as race. Implementing different rates based on race not only undermines the principle of fairness but also violates anti-discrimination laws and regulations designed to protect consumers.

In contrast, the other options reflect legitimate business practices. Granting discounts for safety records rewards policyholders for demonstrating responsible behavior that reduces risk, thereby aligning premiums with actual risk factors. Similarly, offering incentives for policy bundling encourages customers to take multiple policies with the same insurer, reflecting a strategy to reward customer loyalty and reduce administrative costs. Providing benefits for good health promotes wellness and can help lower claims, thus representing a fair incentive aligned with the goal of promoting a healthier insured population.