The process by which an insurer decides whether to issue a policy is known as

Underwriting is the process by which an insurer evaluates an applicant’s risk profile to determine whether to issue a policy, what coverage to offer, and at what premium rate. This involves assessing factors such as medical history, lifestyle, and financial information to ensure the applicant meets the insurer’s standards.

Option A: Incorrect. Classification refers to grouping applicants into risk categories (e.g., standard, substandard) during underwriting, not the entire process.

Option B: Incorrect. Risk pooling is the practice of spreading risk across a group of policyholders, not the decision to issue a policy.

Option C: Correct. Underwriting is the process of evaluating and deciding whether to issue a policy.

Option D: Incorrect. Selection is a component of underwriting but not the term for the entire process.

This question aligns with the Prometric content outline under “Underwriting,” which covers the principles and processes of risk assessment.