California-Specific RulesQuestion 58 of 158
Which statement best describes the California Earthquake Authority (CEA)?
a.A reinsurance pool that pays only for commercial earthquake losses
b.A federal agency that pays earthquake losses anywhere in the United States
c.A non-admitted surplus-lines facility that writes only above $10 million in value
d.A publicly managed, privately funded earthquake insurer used by participating carriers to satisfy the mandatory offer
Explanation
The CEA, created by statute in 1996, is publicly managed but funded by participating private insurers. Most admitted residential property carriers in California satisfy the mandatory earthquake offer by issuing CEA policies rather than writing the risk on their own paper. It is not federal, not a commercial-only reinsurer, and not a surplus-lines market.
Law Reference: Cal. Ins. Code §10089.5 et seq.Practice all 158 questions free — no signup required.
Related questions on this topic
- A California homeowner buys a new admitted-carrier homeowners policy and is silent about the earthquake offer that accompanies the application. Under the Mandatory Earthquake Insurance Offer Law, what is the result?
- A homeowner in a brush-exposed canyon has been declined by three admitted carriers because of wildfire risk. Which California program is designed to serve as the insurer of last resort for this property?
- A wildfire prompts the Governor to declare a state of emergency in two counties. Insurance Code §675.1 then bars a property insurer from doing what, and for how long?
- Proposition 103 reshaped California rate regulation. Which statement about the resulting framework is correct?
- Under §1861.02, in what priority order must a California auto insurer apply the three mandatory rating factors?
- An insurer chooses not to renew a personal homeowners policy at its natural expiration. How many days before expiration must it mail written notice to the named insured under California law?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California Personal Lines Insurance License Exam · How we review