Which of the following is a necessary step in an insurance transaction?

The issuing of an insurance contract is a fundamental step in an insurance transaction because it formalizes the agreement between the insurer and the insured. This contract outlines the terms and conditions under which the insurer provides coverage, as well as the duties and obligations of both parties. It is the document that establishes the insurance relationship and provides the insured with assurances of coverage and potential benefits in case of a loss.

In the context of insurance transactions, premium collection and advertising of a policy are important processes, but they occur within the framework of entering into a contract; they are not inherently necessary to define the primary transaction. Claim denial is a response to a specific situation rather than a requisite step in initiating an insurance policy. Therefore, the issuance of the insurance contract is the critical action that enables the transaction itself to be legally recognized and enforceable.