Before 1988, insurance companies in California were free to charge wha

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!


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