California-Specific RulesQuestion 70 of 215
Which statement about the California Earthquake Authority (CEA) is correct?
a.It is a private mutual insurer wholly owned by its policyholders
b.It writes earthquake policies directly through CEA-employed agents only
c.It is a publicly managed, privately financed entity that issues earthquake policies through participating insurers
d.It guarantees earthquake losses for any California property regardless of insurer
Explanation
The CEA, established under Cal. Ins. Code §10089.5 et seq., is a publicly managed but privately financed entity. Participating residential insurers issue CEA earthquake policies to their own customers, who can choose CEA coverage instead of the insurer's own. The CEA is neither a mutual insurer nor a direct-to-public carrier, and it covers only policies written by participating insurers.
Law Reference: Cal. Ins. Code §10089.5+ (CEA)Practice all 215 questions free — no signup required.
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