State RegulationsFL specificDifficulty 2/5
A Tampa business owner buys health coverage from an insurer that never qualified in Florida and holds no certificate of authority. If that insurer later fails, what is the effect on the owner's protection?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Chapter 631, Florida Statutes, the guaranty association protects policyholders of member insurers, which are the authorized insurers that participate in the association. A non-admitted insurer that never qualified in Florida leaves its customers without that association protection, which is why Florida consumers are advised to buy only from authorized insurers.
Why the other options are wrong
- A) FLAHIGA pays covered claims of member insurers within statutory limits; it owes nothing to customers of an unauthorized insurer.
- B) OIR does not reincorporate failed companies; qualification is prospective, and insolvency leads to a receivership proceeding.
- D) No personal obligation of the CFO exists; consumer recovery depends on the authorized-insurer framework.
Memory hook
Unauthorized seller fails: association stays home.