What are various courses of action available to the underwriter when a proposal for insurance is received? Whether underwriter can make any modifications while accepting a proposal of insurance ?

When a proposal for insurance is received, the underwriter has four possible courses of action: Accept the risk at standard rates; Charge extra premium depending on the risk factor; Impose special conditions; Reject the risk. The underwriter can accept a proposal, reject it or accept it with certain modifications. Some of the modifications that can be made are: Hazard incidence can be reduced: For loss prevention and minimisation, underwriters can recommend certain changes that will safeguard against physical hazards. For example, installing sprinkler systems and better fire-fighting equipment in offices will reduce damages in case of fire. Changing rating plans and policy terms: Sometimes a proposal that seems unacceptable at one rate may become a desirable business under another rating plan or with special conditions such as compulsory excess.