Which statement about Joint Underwriting Associations is true?

• A. Policyholders must be able to purchase insurance on the open market
• B. JUA operations are overseen by a Board of Governors
• C. JUA handles only auto insurance
• D. JUA rates are set by insurers with no oversight

Answer: (B)

Joint Underwriting Associations are state-created pools that provide coverage when the private market won’t issue it to certain drivers, and their operations are overseen by a Board of Governors. This board, made up of representatives from participating insurers and appointees of the Insurance Commissioner, guides the association, approves rates and rules, and monitors solvency and compliance. That governance ensures there’s regulatory oversight and accountability in how the JUA operates and how premiums are set. The idea that policyholders must be able to buy insurance in the open market isn’t correct for JUAs, since they exist to serve those who can’t obtain coverage there. And rates aren’t set without oversight; they’re subject to board approval and regulatory supervision.