Georgia Property & Casualty Practice Exam

For which of the following acts may the Commissioner suspend or revoke an insurer's certificate of authority?

1. Permitting agents to sell replacement policies

2. Refusing to be examined

3. Advertising its policies in other states

4. Transacting surplus lines insurance

The correct answer is: Refusing to be examined

The act of refusing to be examined is a significant violation of regulatory standards that can lead the Commissioner to suspend or revoke an insurer's certificate of authority. Insurance regulators, including the Commissioner, have the authority to conduct examinations of insurance companies to ensure compliance with the laws and regulations governing the industry. This process is essential for maintaining the integrity of the insurance market and protecting policyholders. If an insurer outright refuses to cooperate with such examinations, it demonstrates a lack of accountability and transparency, which are critical factors in maintaining public trust and regulatory oversight. Other actions mentioned, such as permitting agents to sell replacement policies or advertising policies in other states, might involve regulatory scrutiny or require proper disclosures but do not inherently call for the extreme measure of suspending or revoking a certificate of authority in the same way that refusal to be examined does. Transactions in surplus lines insurance, while highly regulated, are legally permissible under certain conditions if proper procedures are followed. Hence, the refusal to allow an examination stands out as a clear breach of duty to comply with regulatory requirements.