California-Specific RulesQuestion 58 of 158
Which statement best describes the California Earthquake Authority (CEA)?
a.A federal agency that pays earthquake losses anywhere in the United States
b.A publicly managed, privately funded earthquake insurer used by participating carriers to satisfy the mandatory offer
c.A reinsurance pool that pays only for commercial earthquake losses
d.A non-admitted surplus-lines facility that writes only above $10 million in value
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.
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