When can an insurer freely choose to accept a risk?

The correct choice is that an insurer can freely choose to accept a risk at the time of risk assessment. This is because the risk assessment stage allows the insurer to evaluate the information provided by the applicant, including details about the insured party and the specifics of the risk itself. During this stage, the insurer has the opportunity to analyze this information against their underwriting criteria, which determines the acceptance or rejection of the risk.

Acceptance of the risk is not constrained by factors such as the expiration of a quotation or the signing of a contract. Before a contract is finalized, insurers can still assess the risk and decide whether to proceed with offering coverage or to modify the terms. Therefore, it is essential to identify that the insurer maintains the freedom to accept or decline the risk at the assessment stage based on their analysis and guidelines.