Factors that may result in more restrictive underwriting decisions include which of the following?
I.Inadequate rates.
II.The unavailability of reinsurance at favorable terms.
A)I only
B)II only
C)both I and II
D)neither I nor II

Question

Quizplus · Accepted Answer

Inadequate rates and unavailability of reinsurance at favorable terms both increase the risk to the insurer and may result in more restrictive underwriting decisions. Inadequate rates mean that the premiums are not adequate to cover the potential losses, and therefore insurers may need to be more selective in the risks they take on. Unavailability of reinsurance at favorable terms means that insurers may not be able to transfer some of the risk to reinsurers, increasing their own risk exposure and leading to more cautious underwriting.

Factors That May Result in More Restrictive Underwriting Decisions Include