Which of the following is true regarding the California Insurance Guarantee Association?
a. The Association is directed by a 9 member Board of Governors who are elected by voters for a two year termb. The maximum claim covered would be $500,000 or the policy limitc. The purpose of the association is that each member be provided with insolvency insuranced. The association is funded by its member insurers
It is true regarding the California Insurance Guarantee Association that the association is funded by its member insurers.
Option: (D)
Explanation:
The amount of maximum claim that can be covered through a policy provided by the CIGA is $300,000.
Other than its member insurers, the association is also funded through investment income and from the sale of the assets kept as collateral by insolvent member insurers.
The general purpose of the association is to help an insolvent insurer by paying for the obligations on his name.
