Question

The OIR has the right to require submission of statistical data from insurers and agencies including all of the following information EXCEPT ___________.

1) Number of policies issued
2) Premiums collected
3) Claims paid
4) Number of employees

Answer 1

The OIR typically does not require the number of employees' data from insurers. Instead, they focus on the number of policies issued, premiums collected, and claims paid, ensuring the company's financial stability and compliance with insurance laws.

Step-by-step explanation:

The Office of Insurance Regulation (OIR) has the authority to request statistical data from insurers and agencies to monitor and regulate the insurance market effectively. However, one piece of information that the OIR typically does not require is the number of employees within an insurance company. The data they usually require include the number of policies issued, the premiums collected, and the claims paid. These are crucial for assessing the financial health of the insurer and ensuring that it can meet its obligations to policyholders.

Fundamental laws of insurance dictate that the payments received from policyholders must be sufficient to cover the claims paid out, the administrative costs of running the company, and also to generate profits. Excessive regulations that force insurers to set premiums too low could lead to adverse selection, causing insurers to exit markets or refuse to insure high-risk parties.