Who sets the rules and conditions for the policyholder in an insurance policy?

The insurer is responsible for setting the rules and conditions in an insurance policy. In the context of insurance, the insurer drafts the policy language, which outlines the coverage, exclusions, terms, and conditions of the contract. This ensures that all parties understand their rights and obligations under the policy.

The insurer must adhere to regulations and standards set by state insurance departments, but the primary responsibility for the content of the policy lies with them. The policyholder typically agrees to these terms when purchasing the insurance; however, they do not have the authority to dictate the fundamental rules of the policy. Understanding the insurer's role is crucial, as it reflects the broader framework of risk management where insurers balance the need to provide coverage and the financial realities of operating a profitable insurance business.