Before 1988, insurance companies in California were free

Question

Before 1988, insurance companies in California were free to charge whatever rates the market would bear, needing no approval from regulators before raising rates.

Option A
Option B
Option C
Option D
Option E

(This question is from Official Guide. Therefore, because of copyrights, the complete question cannot be copied here. The question can be accessed at GMAT Club)

Solution

Sentence Analysis

Here’s the sentence structure:

  • Before 1988, (Prepositional phrase modifying the main verb ‘were’)
  • insurance companies (Main Subject)
    • in California (Prepositional phrase modifying the main subject)
  • were free to charge whatever rates the market would bear, (Main verb: were. ‘whatever…bear’ is a noun clause acting as an object for ‘charge’)
    • needing no approval from regulators before raising (Verb-ing modifier modifying the main clause. ‘before’ is followed by a verb-ing modifier which makes sense with the subject ‘insurance companies’)

The sentence says that before 1988, insurance companies were free to decide rates and did not need approval from regulators before raising rates. The second part ‘not needing approval from regulators’ is presented as a verb-ing modifier to the main clause. This construction makes sense since ‘not needing approval from regulators’ explains how the insurance companies were free to decide rates. Besides, the verb-ing ‘needing’ makes sense with the subject ‘insurance companies’. The sentence, as is, looks fine.

Option Analysis

(A) Correct.

(B) Incorrect. For the following reasons:

  1. Pronoun Disagreement – Singular pronoun ‘it’ cannot refer to plural ‘insurance companies’.
  2. Incorrect Preposition – The use of the preposition ‘by’ is incorrect. The companies will need approval ‘from’ regulators, not ‘by’ regulators.

(C) Incorrect. ‘needing’ is not parallel to anything before ‘and’. This is a deterministic error.

Even though the reference of ‘they’ seems ambiguous since it can refer to both insurance companies and regulators, pronoun ambiguity is generally not a major error.

(D) Incorrect. The use of the preposition ‘by’ is incorrect, as explained in the analysis of option B. Besides, the structure of this option ‘approval not needed’ makes it passive in voice and is thus less preferable to the structure in the original sentence.

(E) Incorrect. The structure ‘the raising of rates’ is incorrect. The correct expression is ‘raising rates’. Besides, the structure ‘no approval needed’ makes it passive in voice and is thus less preferable to the structure in the original sentence.

About Chiranjeev Singh

An Alumnus of IIM Ahmedabad and with scores of 780 (2017) and 770 (2013) on GMAT and 99.98%ile on CAT, Chiranjeev is one of the most qualified GMAT tutors in India. Chiranjeev has earlier served as Director of Curriculum at e-GMAT. Chiranjeev has been helping students ace GMAT since 2012. He follows a concept-based methodology to teaching GMAT and is very committed to student success. You may contact him for any private GMAT tutoring needs at CJ@GMATwithCJ.com. He conducts online sessions for students across the world.

Leave a Reply

Your email address will not be published. Required fields are marked *

eight − 1 =