Question

What is the purpose of the Property and Casualty Insurance Guaranty Association?

A. to ensure that consumers have access to the lowest possible insurance rates
B. to protect policyholders, insureds, and claimants from insurers who become insolvent
C. to increase competition among insurers in Oklahoma
D. to guarantee that all applicants for insurance are able to obtain it from an authorized insurer

Answer 1

The Property and Casualty Insurance Guaranty Association exists to protect consumers when an insurance company goes insolvent. It acts as a safety net for those who have policies with failed companies.

Step-by-step explanation:

The purpose of the Property and Casualty Insurance Guaranty Association is B. to protect policyholders, insureds, and claimants from insurers who become insolvent. These Guaranty Associations serve as a safety net for policyholders and claimants to ensure they receive at least a portion of the benefits they are owed when an insurance company fails financially and cannot fulfill its contractual obligations. In the context of government regulation of insurance, it's important to note that while the state insurance regulators work to keep insurance prices low and ensure that everyone has access to insurance, there is no absolute guarantee for high-risk individuals to obtain insurance at low costs, and markets do require certain insurance purchases, such as auto and homeowner's insurance.