State RegulationsOH specificDifficulty 1/5
Under Ohio insurance law, an insurance company is regarded as insolvent when it:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
ORC 3903.01(O) defines insolvency for insurers in terms of the company's inability to meet its financial obligations as they mature — the classic inability-to-pay standard. The definition matters practically because it anchors Ohio's insolvency-related regulatory framework, including supervisory and rehabilitation or liquidation processes designed to protect policyholders and claimants when a company cannot pay.
Why the other options are wrong
- B) Reporting a net loss, even for consecutive quarters, is a profitability issue and does not by itself meet the statutory inability-to-pay standard for insolvency.
- C) A company may legally stop writing new business in a line while remaining fully able to pay its obligations; that withdrawal is not insolvency.
- D) A late annual financial statement is a reporting and compliance problem subject to regulatory action, but it is not the definition of insolvency.
Memory hook
Insolvent = can't pay obligations when due, not merely unprofitable.