Hello Everyone!

Let's take a closer look at this question, one issue at a time, so we can narrow down the options to the one correct answer! Before we dive in, here is the original question with important differences between the options highlighted in orange:

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

(A) needing no approval from regulators before raising
(B) and it needed no approval by regulators before raising
(C) and needing no approval from regulators before they raised
(D) with approval not needed by regulators before they raised
(E) with no approval needed from regulators before the raising of

Right away, a few major differences between each option jump out:

1. approval from / approval by
2. raising / they raised / the raising of
3. needing / and it needed / and needing / with...not needed / with...needed

Since #1 on our list will knock either 2 or 3 options out of the way, let's start there: approval from / approval by. While both options are grammatically correct to use, there is a slight difference between the two:

approval from = ACTIVE VOICE / We need approval from the panel by 5:00pm Wednesday.
approval by = PASSIVE VOICE / We need approval by the panel by 5:00pm Wednesday.

Since the GMAT prefers active voice, we should eliminate any options that use "approval by" because they are written in passive voice:

(A) needing no approval from regulators before raising
(B) and it needed no approval by regulators before raising
(C) and needing no approval from regulators before they raised
(D) with approval not needed by regulators before they raised
(E) with no approval needed from regulators before the raising of

We can eliminate options B & D because they use passive voice.

Now we're left with options A, C, and E. Let's move on to #2 & #3 on our list: raising / they raised / the raising of and needing / and needing / with no...needed . For this part, let's make sure each option is concise, accurate, and doesn't contain any vague language:

(A) needing no approval from regulators before raising

This option is CORRECT because it's clear, concise, and makes logical sense! Starting with "needing" turns this into a modifier, and it's clear that the phrase is modifying the subject "insurance companies in California."

(C) and needing no approval from regulators before they raised

This option is INCORRECT for a couple reasons. First, the coordinating conjunction "and" isn't being used correctly here. Any time you use the conjunction "and," what comes before and after the comma MUST be able to stand alone as independent clauses. The phrase after the comma cannot stand alone, so it shouldn't have a conjunction with it. Second, the pronoun "they" here is vague and potentially misleading. It's unclear if "they" is referring to the insurance companies or regulators. If we follow general rules of grammar, "they" is referring to what's closest to it, which would be "regulators," which is not accurate. The insurance companies raise and lower rates, NOT the regulators!

(E) with no approval needed from regulators before the raising of

This option is INCORRECT for a couple reasons. First, it's overly wordy and awkward to say "with no approval needed" isn't as concise as "needing no approval." Second, the phrase "the raising of" is not only passive voice, which is a big no-no on the GMAT, but it's also unclear WHO is doing the action. There is no clear indication of who actually does "the raising of" the rates: the insurance companies, the regulators, or some other entity? If it's not 100% clear, then it's not likely to be a good option on the GMAT.

There you have it - option A is the correct answer because it uses active voice, concise wording, and clear indicators of who is carrying out which actions!


Don't study for the GMAT. Train for it.
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(A) Correctneeding no approval from regulators before raising
(B) and it needed no approval by regulators before raising
It is wrong. Here we are talking about companies so plural pronoun is needed
(C) and needing no approval from regulators before they raised
Parallelism issue
(D) with approval not needed by regulators before they raised
with...... is an adverbial and is worng
(E) with no approval needed from regulators before the raising of
same as D

The following is how I chose answer choice (A)

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

(A) needing no approval from regulators before raising
=> This option contains a participial phrase modifying the preceding clause. No error is spotted. Logical meaning.
CORRECT!

(B) and it needed no approval by regulators before raising
=> Wrong. There is no singular subject that can be antecedent of this pronoun. In this case, agent of the action "needed no approval..." should be "insurance companies" which is a plural noun.

(C) and needing no approval from regulators before they raised
=> Wrong. "and" requires parallelism, but "leading" is not parallel with "were"

(D) with approval not needed by regulators before they raised
=> Wrong. First, "with" makes the sentence more wordy. Second, why do we have to use a passive voice "approval not needed by..." while active voice in option (A) is available? Finally, pronoun "they" is ambiguous.

(E) with no approval needed from regulators before the raising of
=> Wrong. Usage of "with" and passive voice make this option less attractive. Also, "the raising of" is a noun in V-ing form, which is less preferred to the verb "raising" in option (A).

-INCORRECT- when we have the correct form of verb "raising" available, construction of the gerund- "the raising of" should be avoided.

Correct option is A
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A. needing no approval from regulators before raising
CORRECT

B. and it needed no approval by regulators before raising
"it" here is wrong since "insurance companies" is prural.

C. and needing no approval from regulators before they raised
"and needing" isn't parallel to "were"

D. with approval not needed by regulators before they raised
"they" here is ambiguous since it could refer "insurance companies" or "regulators"

E. with no approval needed from regulators before the raising of
"the raising of" is wordy. "raising" is better
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Hi utkarshthapak, with C, the sentence would be:

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

and is an indicator of parallelism. We should always first look at the structure of the sentence to the RHS of indicator of parallelism. In option C, we have a participial phrase (needing no approval..) on the RHS.

For the sentence to be parallel, there must be a corresponding matching structure (in this case a participial phrase/adjective) on the LHS of indicator of parallelism. In option C, there is none. Hence, C is not parallel.

p.s. Our book EducationAisle Sentence Correction Nirvana discusses this parallelism approach, its application and examples in significant detail. If someone is interested, PM me your email-id; I can mail the corresponding section.
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Before 1988, insurance companies in California were free to charge whatever rates the market would bear, needing no approval from regulators before raising rates.

A. needing no approval from regulators before raising
Correct
B. and it needed no approval by regulators before raising
- Use of AND is incorrect since such use means that "Approval from regulator for increase in rate" and "insurance companies can charge any rate" are two different act, an idea contrary to original intent. Use of Singular pronoun "IT" for plural antecedent "COMPANIES" is incorrect. Hence Incorrect.
C. and needing no approval from regulators before they raised - Use of AND is incorrect as explained in option B. Use of NEEDING along with RAISED doesn't make any sense. Hence Incorrect.
D. with approval not needed by regulators before they raised
Use of NEEDING along with RAISED doesn't make any sense. Use of WITH leads to RUN-ON sentence. Passive voice is not preferred. Hence Incorrect.
E. with no approval needed from regulators before the raising of
Use of WITH leads to RUN-ON sentence. Hence Incorrect

I dont think option D and E have any problem with the usage of with as it just gives the additional information about the previous sentence.It is acceptable.Need expert views on this issue.

Non-expert here but hope that I can help you on this issue.

2 options (D) and (E) have more than one problem, as follows

D. with approval not needed by regulators before they raised
--> First, pronoun ambiguity - "they" could refer to both "insurance companies in California" and "regulators".
Second, passive voice "approval not needed by regulators" is insufficient and less preferred to active voice used in options (A) and (B).

E. with no approval needed from regulators before the raising of
--> First, insufficient passive voice (as in above choice).
Second, "the raising" is a noun (in the form of complex gerund). According to V-A-N rule, this noun is less preferred to its verb form ("raising"/"raised") as used in options (A), (B) and (C).
Lastly, this option fails to identify agent of the action (raising rates), while based on the original sentence, the agent is insurance companies in California. This causes a slight change in the meaning of sentence. That's why this choice is clearly out.

Hi, I chose option A. Can someone kindly enlighten with the usage of with. Is with here an acceptable form. I know that in option (D) they is ambiguous and in option (E) the raising of looks dubious. But I am not sure about the exact fault in option E. Need help.

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

(A) needing no approval from regulators before raising
correctly modifies the preceding clause "were free to charge whatever rates the market would bear"
What was free to charge? The insurance companies were

(B) and it needed no approval by regulators before raising
"it" can only refer to market. Market need no approval from regulators is not the intended meaning of the original sentence.
Insurance companies don't need approval.

(C) and needing no approval from regulators before they raised
"were" is not parallel with "needing". It is also unclear what "they" is referring to. Regulators? Insurance companies?

(D) with approval not needed by regulators before they raised
Same problem with (C)

(E) with no approval needed from regulators before the raising of
Passive voice, seems inferior to answer (A)

Please correct my explanation in (A) if I did it wrong.

Hey gmatacer40 ,

E is wrong because it is following the incorrect usage of "with".

Refer to below article to learn more on the usage.

With Usage on GMAT

Hope that makes sense?
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Hi egmat,

I am confused why the construction 'with no approval needed' causes confusion. Is it true always?

What about the below sentence using the same phase -
With no approval needed, the visitors were allowed an easy entry into the premises.

As per my understanding - here the phrase 'with no approval needed' acts as an adverbial modifier and it modifies the subsequent main sentence - 'the visitors were allowed an easy entry into the premises'

Please let me know if I am wrong

When we're looking at meaning, it doesn't generally work to say that a given phrase is always confusing or ambiguous. What matters is how clear it is in the given context. In the context of this sentence, the phrase "with no approval needed" does not make the meaning as clear as A. It doesn't help that we have additional imprecise language--"the raising of rates"--which obscures who is raising rates. Even if it's still clear to us who is raising rates without the need for approval, why express the thought in this imprecise way?
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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.

There is nothing wrong with the usage of "with" in option E. There are several other errors, which are already described by the experts above.
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sudarshan22, hazelnut, generis can anyone of you guys help me with eliminating E ?



People in the posts above have quoted the usage of passive voice as a reason for eliminating, I dont think that it is that strong an issue.

Also, while going through the posts, i see that 'with' has an error, but I think that it is modifying the previous clause "ICs charging interest rates without any constraints"

Thanks in Advance !!

I went for C, thinking that "were" (without any repetition) as auxiliary verb is parallel with "needing". How is your reasoning that they are not parallel?

Approval from(you take approval from someone before doing something) or approval by

With the above in mind, Eliminate B and D

(A) needing no approval from regulators before raising
Correct Answer

(C) and needing no approval from regulators before they raised
Use of and, not required, free to charge not || with needing

(E) with no approval needed from regulators before the raising of
"raising of" wordier, i will raise rates, raising ??
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