Arkansas Life and Health Insurance Practice Exam 2025 – Complete Study Guide

The correct answer is that dissatisfied consumers brought a complaint accusing the company of unfair discrimination. In this context, unfair discrimination refers to the practice of treating similar risks in different ways without a legitimate basis for doing so. By refusing to insure buildings over 50 years old solely based on their age, Luke's company is categorizing all such buildings as 'high risk' without considering individual factors that may vary between those properties.

This blanket classification disregards the specific conditions and maintenance of individual buildings, which is critical in underwriting. Fair competition pertains to the broader competitive practices within the insurance market, while fair marketing involves honest advertising and promotional strategies. Unfair inducement involves persuading someone to purchase a product through deceptive methods. These terms do not appropriately describe the situation at hand, which is fundamentally about discriminatory practices against certain types of properties based on age rather than their specific risk characteristics.