Community Rating pricing focuses on which factor?

Community Rating pricing focuses on which factor?

• A. Age of the insured.
• B. Geographic region of all insureds in a group.
• C. Occupation.
• D. Health history of each insured.

Answer: (B)

Community rating pricing bases premiums on the overall risk of a broad area rather than an individual’s health status or age. In this approach, a single rate is set for everyone within a defined geographic region, pooling the costs across all insureds in that area. That’s why the factor being focused on is the geographic region of all insureds in a group. Individual health history, age, or occupation aren’t the determinants of the rate in this method.

Community rating pricing bases premiums on the overall risk of a broad area rather than an individual’s health status or age. In this approach, a single rate is set for everyone within a defined geographic region, pooling the costs across all insureds in that area. That’s why the factor being focused on is the geographic region of all insureds in a group. Individual health history, age, or occupation aren’t the determinants of the rate in this method.