Which of the following actions of classifying risk is prohibited?

The action of surcharging property insurance based on an individual's developmental disabilities is prohibited because it constitutes discrimination against a protected class. Insurance regulations mandate that rates must be based on insurable risk factors that are relevant to the likelihood of a claim. Charging a higher premium solely due to an individual’s disability does not relate to the individual's ability to mitigate risk and could be considered an unfair practice.

In contrast, surcharging an auto policy for a series of traffic violations and charging a rate based on driver records are practices that relate to assessing risk based on driving behavior, which is directly linked to the likelihood of claims. Establishing a property insurance rate based on the number of people in a household is permissible, as it can be associated with the likelihood of certain claims based on occupancy rates and associated risks. Thus, D represents a clear violation of fair underwriting practices.