New York Insurance Exam Practice Question
What is the purpose of underwriting in insurance?
Correct Answer: B
Rationale: Underwriting in insurance primarily serves to assess the risk of insuring an individual, ensuring that the insurer can evaluate potential losses accurately. This process involves analyzing an applicant's information to determine appropriate premiums and coverage.
Option A is incorrect as marketing insurance products focuses on promoting offerings rather than evaluating risk. Option C misrepresents underwriting's role; paying out claims occurs after underwriting has determined the terms of coverage. Option D is also inaccurate, as setting state regulations is a governmental function, not a responsibility of underwriting.
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