What does ratification refer to in the insurance industry?

In the insurance industry, ratification refers to the approval of policy forms and rates. This process is crucial because it ensures that the insurance policies and their associated rates have received the necessary regulatory oversight and are in compliance with legal and regulatory standards. By ratifying policy forms and rates, insurers confirm that they will use these specified terms and conditions when underwriting policies.

This process helps maintain a standardized approach within the industry, ensuring that policyholders are provided with fair and consistent coverage options. Additionally, the ratification of rates ensures that the pricing for insurance products is justified based on the risk assessments and actuarial data.

The other options do not capture the primary focus of ratification in the insurance context. Investment strategies pertain more to how insurance companies manage their investment portfolios, while agent commissions and claims settlements are distinct aspects of insurance operations that do not relate directly to the ratification process concerning policy forms and rates.