Governing Fairness in Insurance Pricing: The Trilemma of Actuarial Adequacy, Solidarity, and Causal Legitimacy

Our paper, Governing Fairness in Insurance Pricing: The Trilemma of Actuarial Adequacy, Solidarity, and Causal Legitimacy, wtih Olivier Côté and Marie-Pier Côté has just been published in the Journal of Business Ethics, Insurance is at once a bilateral transfer of risk and a collective device for sharing it. These two functions pull insurance pricing in opposite directions, and because every transaction is mediated by money, the fairness of an insurance contract is mostly driven by the fairness of its price. We argue that this fairness, assessed with respect to pre-specified protected attributes, is governed by a trilemma between actuarial adequacy, social solidarity, and causal legitimacy. Actuarial fairness evaluates premiums against a risk-focused pricing benchmark. Solidarity justifies selected departures from that benchmark to preserve accessibility and enable targeted redistribution. Causal legitimacy inverts the presumption: every price differentiation must earn its place by resting on an admissible causal relationship. These three logics are individually compelling but cannot be fully realized simultaneously: strengthening one predictably pressures the others. We make two contributions. First, we develop a sector-specific normative framework that translates algorithmic-fairness debates into the monetary, institutional, and distributive language of insurance, and clarifies why the resulting tensions are structural. Second, we introduce a governance approach, including a scorecard, a causal due-diligence protocol, and a comply-or-explain oversight architecture to make pricing trade-offs explicit, reviewable, and justifiable. Every premium is a normative choice: we provide the architecture for governing it as such.