(1) What problem areas were singled out by Professor Kimball with regard to=
=20
present liquidation law?
(2) What were among the stated purposes of the Members' Participation=20
Council (MPC) of the NOLHGA?
(3) What lines are excluded from coverage under guaranty funds?
Answers:
(1)
a. He was concerned about loss of risk protection.
b. In most liquidations, there had been an insufficiency of funds, that is,=
=20
simply not enough money remaining to pay loss claimants adequately, even=20
with statutory distribution priority.
c. Delay in payment commonly experienced in insurance liquidations by loss=20
claimants was unacceptable.
His solution for addressing these problems was the formation of state-level=
=20
guaranty associations.
(2)
a. To enable economies of scale.
b. Consistent interpretation and application of the laws.
c. To improve the efficiency, timeliness, and cost-effectiveness.
(3)
a. Title
b. Warranties and Service Contracts
c. Ocean Marine
d. Government Insurance
e. Fidelity
f. Surety
g. Financial Guaranty
h. Reinsurance.
a.-d. are excluded because "these present problems quite distinct from thos=
e=20
of property and liability insurance."
e.-g. are excluded because their primary purpose is to provide protection=20
for investment and financial risks which are not appropriate to be covered=20
under the Model.
h. is excluded because companies assuming reinsurance should know the=20
financial condition of the companies whose obligations they are assuming.
----------
From: dlents@IIGroup.com
To: TollyGZ@aol.com; Dan Perry
Subject: Re: wilcox
Date: Wednesday, April 22, 1998 5:30AM
Historically there has been articles on Guarantee Funds, so a good source
of general questions are available from old exams. You might also want to
know Kimball's 3 principles & the forth principle added in the conclusion