Ace the Arkansas Insurance Adjuster Exam 2026 – Switch Up Your Career Mojo!

Question: 1 / 400

Why do residual market insurance programs exist?

To provide cut-rate policies for low-income consumers

Because high-risk consumers need more coverage

To offer simple coverages for high-risk consumers

No private insurer wants to issue high-risk policies

Residual market insurance programs exist because no private insurer wants to issue high-risk policies. These policies are high-risk because they cover consumers who are more likely to experience unexpected or costly events, and thus private insurance companies do not want to bear the financial risk associated with these policies. This is why residual market insurance programs are necessary, as they provide a safety net for high-risk consumers who might otherwise struggle to find coverage. Options A, B, and C are incorrect because they all provide reasons for residual market insurance programs that do not fully capture the purpose and function of such programs.

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