Georgia Adjuster Practice Test

What is the primary purpose of the Georgia Insurance Guaranty Association?

1. To regulate insurance prices

2. To cover claims of solvent insurers

3. To cover claims of insolvent insurers

4. To provide insurance education

The correct answer is: To cover claims of insolvent insurers

The primary purpose of the Georgia Insurance Guaranty Association is to provide protection to policyholders when an insurance company becomes insolvent. This association steps in to pay valid claims from policyholders of the insolvent insurer, ensuring that they do not suffer financial loss due to the failure of their insurance company. This function is crucial in maintaining public confidence in the insurance system and providing a safety net for policyholders. By covering claims of insolvent insurers, the Georgia Insurance Guaranty Association helps to stabilize the insurance market and protects consumers from the repercussions of an insurer's inability to fulfill its financial obligations. This is particularly important in the insurance industry, where policyholders depend on the promises made by their insurers to cover various risks. The other choices do not align with the core mission of the association. For example, regulating insurance prices does not fall under the association's duties, nor does it address claims from solvent insurers or focus on providing education. The association's primary role is specifically targeted towards claims related to insolvency, making the correct answer evident.