What may an insurer do if a policy is not approved as applied for?

When a policy is not approved as applied for, the insurer typically has the option to make a counteroffer. This means that rather than outright rejecting the application, the insurer can propose terms that modify the coverage, premium, or other conditions in order to meet their underwriting guidelines while still providing some level of protection to the applicant.

This process allows the insurer to balance their risk assessment with the applicant's needs, fostering communication and offering a potential path to policy issuance instead of an outright denial. By making a counteroffer, the insurer maintains the opportunity to establish a relationship with the client, which might ultimately lead to a sale that is satisfactory for both parties.

The other options do not align with standard practices. For instance, revising the application might imply the applicant makes changes, which is not typically under the insurer's control. Issuing a refund would generally not be applicable at this stage because no premium payment would have been collected until the policy is approved. Dismissing the application completely would eliminate any further engagement with the applicant, which is not the common first step in the underwriting process when adjustments can be made.