Final answer:
The insurance commissioner may issue a temporary license when strict regulations cause insurance companies to exit the market, ensuring consumers maintain access to insurance even as companies adjust or new providers enter the market.
Step-by-step explanation:
The insurance commissioner may issue a temporary license in situations where there has been a significant change in the insurance market, such as when insurance companies withdraw from a state due to strict regulations requiring them to sell policies at low premiums to everyone, including high-risk and medium-risk parties. This can disrupt the balance, as the fundamental law of insurance states that the average amount individuals receive cannot exceed the average amount paid in premiums. The temporary license allows for continuity of services while new or existing companies adjust to the market conditions or when there's a need to quickly address a gap in the insurance coverage within the state.
For instance, as observed in New Jersey and Florida, strict state regulations can lead to a significant number of insurers exiting the market, creating an environment that may necessitate the issuance of temporary licenses to ensure that consumers continue to have access to necessary insurance products.