What is one consequence of an insurance company being declared insolvent in Ohio?

When an insurance company is declared insolvent in Ohio, one of the significant consequences is that policyholders may seek compensation from the Ohio Insurance Guaranty Association (OIGA). This association is designed to protect consumers in the event of an insurer's insolvency, ensuring that policyholders can recover at least a portion of their claims and benefits even if the company is unable to fulfill its obligations.

The role of the OIGA is crucial, as it operates to provide a safety net for policyholders, thus promoting consumer confidence in the insurance market. Without such a mechanism, financial distress at an insurance company could leave policyholders without coverage or compensation for claims, resulting in negative financial consequences for them.

The other options imply actions that do not align with the regulations surrounding insolvent insurers in Ohio. For example, an insolvent insurance company cannot continue to operate without supervision; regulatory oversight is heightened in such cases to manage the situation effectively. Selling the company without restriction also goes against regulatory practices, as certain guidelines must be adhered to during insolvency. Lastly, while notifying policyholders is essential, it is not an immediate consequence of insolvency but rather a procedural requirement that follows regulatory protocols. Hence, the ability for policyholders to seek compensation through the Ohio Insurance Gu