Actuarially fair definition

Actuarially fair means the cost of an annuity is equal to the present value of the regular payments the purchaser expects to receive.
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Actuarially fair means that for every euro of payroll taxes deposited in personal accounts, individuals would surrender future benefits worth one euro in present value (calculated using the government’s long- term borrowing rate and average mortality factors).
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Actuarially fair premiums means that the premiums are intended to be set according to a methodology designed to result in total premiums paid over a long period that equal the total cost of indemnities paid out plus reasonable administrative costs. In the case of RMA approved products, the Administrative and Operating (A&O) costs of a private insurer are actually paid separately. USDA directly reimburses insurers for A&O costs, following a complex set of rules about what costs are allowed. Thus, the total cost of RMA insurance is the premium plus the direct payment for A&O. For LGM-­‐D, the A&O costs are in the vicinity of 20% of the total premium.
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Related to Actuarially fair

  • Actuarially equivalent or "of equal actuarial value" means a benefit of equal value

  • Actuarial equivalent means a benefit of equal value when

  • Actuarial valuation means a mathematical determination of

  • Actuarial method means the method of allocating a fixed level monthly payment on an obligation between principal and interest, pursuant to which the portion of such payment that is allocated to interest is equal to the product of (a) 1/12, (b) the fixed annual rate of interest on such obligation and (c) the outstanding principal balance of such obligation.

  • pension benefit means a pension, annuity, gratuity or similar allowance which is payable—