Final answer:
The responsibility to prove representation of an authorized insurer lays with the producer. Charging a uniform premium for all groups rather than individually can result in unfair cost distribution. Costs may be shifted to other insurance buyers or taxpayers if premiums do not reflect the true risk.
Step-by-step explanation:
The burden of proof for determining that a producer is representing an authorized insurer falls on the producer. It is the producer's responsibility to ensure they are legitimately associated with an authorized insurer and have the necessary credentials to sell insurance. If an insurance company attempts to charge the actuarially fair premium to the group as a whole rather than to each group separately, the result may be that premiums do not accurately reflect the risk associated with each individual group. In situations where premiums are set below the actuarially fair level for a certain group, others - such as taxpayers or other insurance buyers - may end up subsidizing the difference. This can lead to a mispricing of risk and can unfairly distribute costs among different groups.