Insurers do not define risk classes as narrowly as
actuarily possible.
If the annuity price increases, further making the spread on top of the
actuarily fair premium too high, the slope of ADRF will even reverse and become negative.
We won't know for a while if a fewer number of people died during 2008 compared to those who became
actuarily mature during 2007 and the impact of life on deaths.
* There is a competitive banking sector, so that mortgages are priced
actuarily fair.
The Insurance Information Institute (I.I.I.) notes in particular that the exemption gives small insurers, "who would otherwise have too little data to develop
actuarily credible data, the tool to compete."