Your answers to questions 41-43 must be based on the text below, which is entitled “Insolvencies/Guaranty Funds”:
Insolvencies/Guaranty Funds Source: www.iii.org Feb/ 2006 (Adapted)
The regulation of insurance company solvency is a
function of the state. The Gramm-Leach-Bliley Financial
Services Modernization Act of 1999, which allowed
banks, securities firms, insurance companies and other
financial services entities to affiliate and sell one another’s
products, continues this practice. State regulators monitor
the financial health of companies licensed to provide
insurance in their state through analysis of the detailed
annual fi nancial statements that insurers are required to
file and periodic on-site examinations. When a company
is found to be in poor financial condition, regulators can
take various actions to try to save it. Insolvencies do occur,
however, despite the best efforts of regulators.
According to the text, “insolvencies do occur”, which means they