Which of the following best defines an insurer?

The correct definition of an insurer is the entity that underwrites insurance risks. An insurer is typically a company that provides insurance coverage by assuming the financial risk associated with insuring individuals or businesses against potential losses. This entity evaluates applications for insurance, determines the risk involved, and sets premiums accordingly. They are responsible for paying claims when the insured event occurs, thus providing financial protection to policyholders.

This option accurately captures the role and function of an insurer in the insurance industry, which is distinct from the roles of other individuals involved in the insurance process. For example, a person covered by the policy refers to the policyholder or the insured, while the individual applying for life insurance is simply a potential policyholder. The representative selling the policy plays a role in facilitating the insurance transaction but does not underwrite the risks associated with insurance.