Selection and Pricing are intertwined with the third underwriting activity – determining policy terms and conditions. The insurer must decide what type of coverage it will provide to each applicant and then charge a premium appropriate to that coverage. Insurance Advisory Organizations develop policy forms using standard insurance wording. These policy forms are referred as standard forms that contains standardized policy wordings. Some insurers develop their own standard forms that they use in policies for their insureds.
Monitoring Underwriting Decisions
Underwriters periodically monitor the hazards, loss experience, and other conditions of specific insureds to determine whether any significant changes have occurred. Since underwriting decisions involve an assessment of loss potential, hazards and other conditions must be reviewed periodically.
