Which step is typically performed after verifying territory and controls in the underwriting rating process?

Which step is typically performed after verifying territory and controls in the underwriting rating process?

• A. Determine classification
• B. Quote premium
• C. Underwrite terms
• D. Apply rating factors

Answer: (D)

The step after verifying territory and controls is to apply rating factors. Once the risk data are confirmed, the pricing becomes a matter of adjusting the base rate with factors that reflect the specific characteristics of the risk—such as territory, exposure base, payroll, safety controls, and loss history. These rating factors modify the base rate to produce the premium. Classification may determine which base rate category to use, but the actual calculation that turns verified inputs into a price is applying the rating factors. After that, you’d typically move toward quoting the premium and final terms.

The step after verifying territory and controls is to apply rating factors. Once the risk data are confirmed, the pricing becomes a matter of adjusting the base rate with factors that reflect the specific characteristics of the risk—such as territory, exposure base, payroll, safety controls, and loss history. These rating factors modify the base rate to produce the premium. Classification may determine which base rate category to use, but the actual calculation that turns verified inputs into a price is applying the rating factors. After that, you’d typically move toward quoting the premium and final terms.