Question

What is the method used for placing business with the California Automobile Assigned Risk Program?

1. The insurers are drawn randomly from a pool of eligible providers to participate in CAARP.
2. The amount of revenue generated by the insurer is used to determine participate in CAARP.
3. The policies are assigned to the insurer who offers the highest bid to obtain the lucrative CAARP business.
4. The percentage of CAARP policies required is equal to the percentage of regular insurance policies the insurer has issued within the State.

Answer 1

The method used for placing business with the California Automobile Assigned Risk Program is based on randomly selecting insurers from a pool of eligible providers.

Step-by-step explanation:

The method used for placing business with the California Automobile Assigned Risk Program is option 1: The insurers are drawn randomly from a pool of eligible providers to participate in CAARP.

This means that insurers are selected at random to participate in the program, rather than being based on the amount of revenue generated, highest bid, or percentage of policies issued within the State.

This method helps ensure fairness and equal opportunity for insurers to participate in CAARP.