Which statement best describes who cannot bind coverage during underwriting?

• A. The Agent
• B. The Underwriter
• C. The Insurer
• D. The Applicant

Answer: (A)

During underwriting, the focus is on evaluating risk, determining acceptability, and setting terms and pricing. Binding coverage—that is, creating the actual contract—is an action that rests with the insurer’s authority, based on the underwriting decision. The underwriter reviews information and decides whether to accept the risk and on what terms, but the final binding of the policy comes from the insurer. The person who solicits and submits the application serves to gather information and facilitate approvals, but does not bind coverage during the underwriting process. Therefore, the agent cannot bind coverage during underwriting.