Final answer:
Underwriters may offer substandard policies, decline applications, or increase premiums, but cannot issue a standard policy unchanged to an applicant who doesn't qualify. Adverse selection and the need for actuarially fair premiums dictate these practices.
Step-by-step explanation:
The underwriter may choose any of the following actions, EXCEPT issuing the policy without changes. An underwriter is responsible for assessing the risk of insuring an individual and determining whether they qualify for a standard policy. If the underwriter determines that a person does not qualify, they may offer a substandard policy with different terms, decline the application, or increase the premium to reflect the higher risk.