Question

Commissioner will examine the financial affairs of all insurers before issuing a certificate of authority to transact business in Mass. Afterward, examinations will be conducted every _____ years.

A) 2 years
B) 3 years
C) 5 years
D) 7 years

Answer 1

The Commissioner examines the financial affairs of all insurers in Massachusetts before they are allowed to transact business. After the initial examination, insurers are then examined every 5 years to ensure financial stability and compliance with regulations.

Step-by-step explanation:

In accordance with regulatory practices, the Commissioner is responsible for overseeing the financial affairs of insurers operating within Massachusetts. To ensure that insurers are operating within regulatory standards and are financially solvent, an initial examination is performed before they are granted a certificate of authority to conduct business. This process is crucial for the protection of the policyholders and the integrity of the insurance industry.

Following the initial examination, insurers are then subject to periodic reviews. According to the regulations, these examinations are conducted every 5 years to ensure ongoing compliance and financial stability. This system of regular examinations helps maintain the health of the financial system and protects consumers from potential insurer insolvencies.