Underwriting in Insurance
A proposal is an application for an insurance cover. The process of verifying the level of risk in each new entrant is called ‘selection’ or ‘underwriting’. The underwriters may either decline the risk or may provide a quotation in which the premiums have been loaded or in which various exclusions have been stipulated, which restrict the circumstances under which a claim would be accepted and paid.
So date on which insurance proposal was evaluated and verified will be called date of underwriting. Premium should not be recognized on this date. It should be recognized when premium is received and policy is issued.