Module Rule Requirements for Insurers | CTFA Exam Preparation

Module Rule Requirements for Insurers

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Question

The Module Rule requires the insurer to provide:

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Explanations

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A. B. C. D.

A

The Module Rule is a regulation that requires an insurer to provide notification of an adverse financial condition to certain parties. Specifically, the insurer must provide notice to the insurance commissioner of the state in which it is domiciled. The purpose of this notice is to inform the commissioner of the insurer's financial difficulties so that appropriate action can be taken to protect policyholders.

Option A correctly identifies the requirement to provide a copy of the notification of adverse financial condition to the insurance commissioner of the state of domicile. Therefore, option A is a correct answer to the question.

Option B suggests that the insurer must provide evidence of the notification to an auditor. However, there is no requirement under the Module Rule to provide evidence of notification to an auditor. Therefore, option B is not a correct answer to the question.

Option C suggests that both options A and B are correct. As explained above, option A is correct, but option B is not. Therefore, option C is not a correct answer to the question.

Option D suggests that neither option A nor B is correct. However, as explained above, option A correctly identifies the requirement to provide a copy of the notification to the insurance commissioner of the state of domicile. Therefore, option D is not a correct answer to the question.

In conclusion, the correct answer to the question is option A, which correctly identifies the requirement to provide a copy of the notification of adverse financial condition to the insurance commissioner of the state of domicile.