Final answer:
Automatic renewal is typically expected when a one-year renewable term policy is up for renewal each year. Evidence of insurability or policyholder's approval is generally not required, and while premium increases may occur, they are based on factors like age and health, not a mandatory element of renewal.
Step-by-step explanation:
When renewals come up each year for a one-year renewable term policy, the requirement that is typically expected is Automatic renewal. No explicit evidence of insurability or policyholder's approval is usually necessary unless the policy stipulates otherwise or there has been a significant change in the policy terms or the insured's risk profile. While a premium increase may happen, it is not a 'required' aspect of the renewal process—it may vary based on changes in the insured's age, health, or the insurer's rate structure.
Concerning the insurance company charging an actuarially fair premium, if it tries to charge the same premium to the group as a whole rather than to each group separately, it may face the issue of adverse selection. This could lead to loss of lower-risk clients who feel they are being overcharged, while higher-risk clients who are being undercharged would remain. This imbalance could potentially increase the financial risks for the insurance company.