Question

What should the mortality/morbidity charge table reflect?

a.

The expenses for policy administration

b.

The pure risk charges for the cover offered, excluding any allowance for expenses or other parameters

c.

The charges for fund management

d.

The expenses for switching funds within the product

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).The pure risk charges for the cover offered, excluding any allowance for expenses or other parameters Explanation:The mortality/morbidity charge table should reflect the pure risk charges for the cover offered, excluding any allowance for expenses or other parameters. It should be reasonable and consistent with prescribed mortality tables or morbidity tables, if any, and demonstrated with the support of the insurer's own experience.

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