What can the department do to help avoid an insurer insolvency?

The department can help avoid an insurer insolvency by reducing, suspending, or limiting the business volume of the insurer. This approach is grounded in the principle of ensuring that the insurer does not take on more risks than it can manage. By controlling the volume of business, the department can help stabilize the insurer's financial condition, prevent overextension of resources, and ensure that it maintains sufficient reserves to meet its liabilities. This proactive measure helps to maintain the insurer's solvency and protect policyholders from potential losses that could arise from financial instability.

While other options, such as requesting financial audits, can provide valuable insights into an insurer's financial health, they are reactive rather than proactive measures. Increasing advertising may boost business but does not address underlying financial issues. Allowing higher premiums may offer temporary relief but does not tackle the fundamental practices that might lead to insolvency in the first place. Therefore, limiting business volume directly addresses risk management and helps maintain a stable insurance environment.