Which description best matches the Insurance Services Office (ISO)?

• A. an organization that sets rates and standards for North Carolina property and casualty risks.
• B. organization that creates insurance policy forms and rating systems for P&C insurers.
• C. organization that creates insurance policies for Property and Casualty insurers.
• D. an independent auditing firm for insurers.

Answer: (C)

The key idea is that ISO functions as a standards and data provider for the property and casualty insurance industry. It develops standardized policy forms and endorsements and supplies rating information and statistical data that insurers use for underwriting and pricing. ISO does not actually set the rates (that’s done by insurers using ISO’s data and sometimes state guidance) and it does not write policies for insurers. It also isn’t an auditing firm.

So the statement that best fits ISO is that it creates insurance policy forms and rating systems for property and casualty insurers. This captures both the standardized forms and the rating information they provide to insurers.