Final answer:
The most important underwriting principle of group life insurance is the assessment of the group's overall risk characteristics. Hence, option (C) is correct.
Step-by-step explanation:
An important underwriting principle of a group life insurance is C) Group's overall risk characteristics. Unlike individual life insurance policies, group life insurance policies do not typically focus on individual health history or the occupation and hobbies of each member. Instead, they assess the risk based on the characteristics of the group as a whole.
For example, a company offering life insurance might consider the overall health trends of the group or the nature of the work they do as a collective. Actuarial fairness would require looking at the risk of the entire group to set premiums. If a group includes individuals with a history of serious health issues like cancer, the actuarially fair premium would be higher to account for this increased risk.