What options does an insurer have upon receipt of a completed application?

• A. Accept the offer, reject the offer, or counteroffer with a sub-standard policy
• B. Accept the offer only
• C. Reject the offer only
• D. Request additional information before deciding

Answer: (A)

When an application is received, the insurer can proceed in a few fundamental ways based on underwriting. The risk can be accepted exactly as written, the application can be rejected, or the underwriter can propose changes to the terms (a counteroffer), such as a substandard rating or different policy provisions, which the applicant can accept or decline. This reflects how underwriting balances risk and pricing—coverage is issued only if the insurer is comfortable with the terms or can adjust them to make the risk acceptable. While asking for additional information can happen during underwriting, the primary paths after review are to issue as applied, reject, or modify the terms via a counteroffer.