Which of the following situations describes an instance of unfair discrimination?

The situation where an insurer refuses to issue a policy to a male applicant working in the theater industry based on the assumption that he is at higher risk for HIV illustrates unfair discrimination. This scenario is a clear example of bias against a specific demographic group rather than an objective assessment of individual risk.

Underwriting practices should be based on factual data and sound actuarial principles, which means that policies should be determined by specific risk factors relevant to an individual's health, history, or behavior, rather than assumptions tied to gender or occupation alone. Discrimination in insurance occurs when decisions are made based on stereotypes rather than evidence or individual risk assessments, thus making the action in this scenario unfair and potentially discriminatory.

In contrast, the other scenarios present actions based on objective criteria or established underwriting standards, which are standard practices within the insurance industry. Evaluating risk based on driving records or specific high-risk activities reflects the insurer's right to assess the actual likelihood of claims based on concrete behaviors or history rather than assumptions connected to gender or industry.