Underwriting might best be defined as

Question

Question: Underwriting might best be defined as

Options:

1.  The process of taking other people’s money, investing it, and keeping the money
2.  The selection of who is to be insured and the determination of an appropriate premium based on risk
3.  The determination of coverage after an insured files a claim
4.  The process of examining the accounting records of an insurer prior to filing the statutory statement
5.  Determination of how much to pay on a particular loss based on the principle of indemnification

Answer 1

2. The selection of who is to be insured and the determination of an appropriate premium based on risk

Underwriting might best be defined as the selection of who is to be insured and the determination of an appropriate premium based on risk.