The Commissioner may examine the records of an insurance company to determine the company's what?

• A. Solvency
• B. Liquidity
• C. Market Share
• D. Customer Satisfaction

Answer: (A)

Regulators examine an insurer’s records to assess its financial strength and ability to pay claims, i.e., solvency. Solvency means the insurer’s assets are sufficient to cover liabilities and reserves for future policy obligations. By reviewing financial statements, reserves, reinsurance, and capital levels, the commissioner can spot potential solvency problems and act to protect policyholders. Market share and customer satisfaction relate to market position and service quality, not the insurer’s ability to meet obligations. Liquidity concerns cash availability, but solvency is the broader measure of whether the company can fulfill its long‑term commitments.