What role does the insurer play in the subrogation process?

The insurer's role in the subrogation process is to pursue third parties for recovery of loss. When an insurance company pays a claim to its policyholder, it often has the right to seek reimbursement from a third party that may be responsible for the loss. This is known as subrogation, and it is a way for insurers to recover costs and maintain premium rates.

By pursuing recovery from responsible third parties, insurers can mitigate their financial loss from claims they cover. This process helps ensure that the policyholder is compensated for their loss while also holding the responsible parties accountable without negatively impacting the insurance company's financial stability.

The other options do not correctly reflect the insurer's function in subrogation. Issuing refunds to policyholders or handling all claim payments does not specifically relate to the recovery aspect that subrogation entails. Cancelling policies with high claims instead focuses on risk management and underwriting practices, which are separate from the recovery actions associated with subrogation.