Texas Property and Casualty License 2025 – 400 Free Practice Questions to Pass the Exam

The primary role of the Texas Property and Casualty Insurance Guaranty Association is to protect claimants and policyholders in the event of an insurer's insolvency. This association acts as a safety net to ensure that when an insurance company becomes unable to fulfill its financial obligations, the policyholders still have access to the benefits and claims they are entitled to under their insurance policies. By covering claims up to specific limits, the association helps maintain consumer confidence in the insurance market and provides a measure of financial security for policyholders who might otherwise be left without coverage.

The other options involve different aspects of the insurance industry but do not align with the core function of the Guaranty Association. For example, providing insurance for uninsured motorists relates to specific coverage options rather than insolvency protections. Determining insurance rates is typically the responsibility of regulatory bodies and individual insurance companies and does not pertain to the role of the Guaranty Association. Conducting audits for insurance companies is also a function performed by regulatory agencies rather than the Guaranty Association. Therefore, the correct answer emphasizes the crucial function of safeguarding consumer interests when an insurer fails.