PLCaliforniaeasy
The California Automobile Assigned Risk Plan (CAARP) under Cal. Ins. Code §§ 11620-11628 serves which primary purpose?
AA reinsurance pool that spreads catastrophic wildfire-related automobile losses among admitted carriers in proportion to their statewide written premium volume
A residual market mechanism distributing drivers unable to obtain voluntary auto coverage among admitted insurers by market share
CA subrogation clearinghouse that arbitrates and settles inter-carrier uninsured and underinsured motorist disputes between competing admitted insurers
DA guaranty fund that steps in to pay the covered claims of policyholders left unpaid by an insolvent personal automobile insurer in California
Why this is the answer
Cal. Ins. Code §§ 11620-11628 establish the California Automobile Assigned Risk Plan. Drivers who cannot obtain auto liability coverage in the voluntary market apply through a CAARP-certified producer, pay the plan rate (CDI-approved), and are 'assigned' to an admitted insurer in proportion to that insurer's California private passenger auto market share. CAARP also administers CLCA producer certifications under §§ 11629.7-11629.84. Distractors describe the California Insurance Guarantee Association (CIGA), a hypothetical reinsurance pool, and an inter-carrier subrogation forum — none of which is CAARP's role.
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