Final answer:
(A) Individual health histories are generally not considered when underwriting group insurance, as underwriters focus on group-level demographics and occupational risks. An actuarially fair premium for the whole group without differentiation can lead to adverse selection and potential financial losses for insurers.
Step-by-step explanation:
When underwriting group insurance, the factor that is generally NOT considered is A. Individual health histories. In group insurance, the risk is spread across the entire group, and specific individual factors are typically not as important in the initial underwriting process.
Instead, underwriters use group-level demographics such as the size of the group, the industry they work in (occupational risk), and the average age of the group, among other factors.
Charging an actuarially fair premium to the group as a whole poses the risk of adverse selection if the insurance company does not differentiate between high-risk and low-risk individuals. This can lead to higher than expected claims and financial losses for the insurance company if the premium does not adequately reflect the risk within the group.