GOVERNEMENT INSURERS - GENERAL

Question 1

GOVERNEMENT INSURERS – GENERAL

REASONS FOR GOVERNMENT PARTICIPATION

Answer 1

1. Making coverage available & affordable when absent in voluntary market
2. Compulsory purchase of insurance (WC, auto) => must be made available & affordable
3. Convenience => easier for government to set up program quickly
4. Greater efficiency => lower costs through sharing of services between departments
5. Social purposes
   • Rehabilitation & vocational training of injured workers
   • Protecting elderly & disabled
   • Building codes & zoning requirements in flood zones

Question 2

GOVERNEMENT INSURERS – GENERAL

LEVELS OF GOVERNMENT PARTICIPATION AS AN INSURER

Answer 2

1. Exclusive insurer
2. Partnership with private insurer, as reinsurers on specific exposures
   i. Federal – terrorism, crop, flood
   ii. State – WC, residual auto, FAIR, windstorm
3. Competitor to private insurers – WC in some states