What insurer may do, governed by legal document (European) (10)
I believe the answer is:
underwrite
'what insurer may do' is the definition.
The definition suggests a singular noun but the answer is not.
'governed by legal document european' is the wordplay.
'governed by' becomes 'under' (I've seen this before).
'legal document' becomes 'writ' (document from a court).
'european' becomes 'E' (abbreviation e.g. EU).
'under'+'writ'+'e'='UNDERWRITE'
Can you help me to learn more?
(Other definitions for underwrite that I've seen before include "Sign" , "Guarantee financially" , "Accept liability for" .)