An actuarially fair return means
A) returns on investments are indexed to the stock market.
B) returns on investments have to be positive.
C) benefits received,on average,would be equal to the premiums paid.
D) premiums for insurance are generally paid by the government.

Question

Quizplus · Accepted Answer

An actuarially fair return means that the benefits received, on average, would be equal to the premiums paid. This is because the premiums are calculated based on the expected cost of providing the coverage, so an actuarially fair return ensures that the premiums paid by policyholders are sufficient to cover the expected cost of claims. Therefore, an actuarially fair return would result in neither a profit nor a loss for the insurer.

An Actuarially Fair Return Means