When should the director notify the association of an insolvent insurer?

The correct answer, which indicates that the director should notify the association of an insolvent insurer no later than 3 days, is based on regulatory requirements designed to ensure prompt communication and action when an insurer becomes insolvent. This timeframe allows the association to take the necessary steps to protect policyholders and manage the potential fallout from the insolvency.

Insurers provide critical financial protections for consumers, and when one becomes insolvent, it can have significant implications for those insured. By establishing a three-day notification requirement, the regulatory framework helps to ensure that there is timely awareness of the situation. This prompt notification allows the association to commence remedial actions swiftly, safeguarding the interests of affected policyholders and maintaining stability within the insurance market.

This 3-day timeframe balances the need for quick action with the practicalities of gathering necessary information and making a formal notification.