Final answer:
The typical order of regulatory activity when dealing with a troubled insurance company involves identification of the problem, intervention to protect policyholders, supervision and monitoring, and resolution measures if necessary.
Step-by-step explanation:
The typical order of regulatory activity when dealing with a troubled insurance company involves several steps:
- Identification of the problem: Regulators assess the financial health and stability of the insurance company to identify any issues or potential risks.
- Intervention: If a problem is identified, regulators take action to minimize the impact and protect policyholders. This may involve imposing stricter regulations, conducting audits, or requiring the company to submit a plan for improvement.
- Supervision and monitoring: Regulators closely monitor the troubled insurance company to ensure compliance with regulatory requirements and track progress towards financial stability.
- Resolution: If the company cannot overcome its financial difficulties, regulators may initiate resolution measures, such as facilitating a takeover, restructuring, or liquidation to protect policyholders and minimize disruptions in the insurance market.