California-Specific RulesQuestion 58 of 474
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 California homeowners may access through a surplus-lines broker only after three admitted carriers decline the risk
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.This topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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