Which of the following is NOT an "expense" factor considered in developing life insurance rates?

In the context of developing life insurance rates, "expense" factors typically include various costs associated with running the insurance company and servicing policies. Commissions paid to agents and brokers, along with administrative costs for managing policies and customer service, are key components of these expenses.

Claims payouts, while representing the financial obligation of the insurer when a policyholder dies, are not categorized as an expense factor in the context of rate calculation for insurance. Instead, they are considered a fundamental part of the insurer's liabilities and are not included in the expense ratio used for determining premiums.

A reserve for contingencies is a specific reserve set aside to cover unexpected losses or fluctuations in claims experience. This reserve is not considered an immediate operational expense like commissions or administrative costs; rather, it is a financial buffer that affects the overall financial health and risk management of the insurance company.

Therefore, the reserve for contingencies does not belong to the immediate operational expenses used for setting insurance rates, making this the correct answer to the question.