Certified Financial Consultant (CFC) Practice Exam

Who supervises and regulates insurance affairs in California?

1. The governor

2. The Commissioner of Insurance

3. The State Legislature

4. Insurance companies' executives

The correct answer is: The Commissioner of Insurance

In California, the supervision and regulation of insurance affairs fall under the jurisdiction of the Commissioner of Insurance. This position is responsible for ensuring that insurance companies comply with the state's laws and regulations, maintaining financial solvency, and protecting consumer interests. The Commissioner has the authority to issue policies, conduct market conduct examinations, and handle consumer complaints, all within the framework established by California's insurance code. While the governor and state legislature play important roles in shaping policies and laws affecting insurance at a higher level, it is specifically the Commissioner of Insurance who carries out the day-to-day regulatory functions necessary to oversee the insurance industry. Insurance company executives manage their respective firms but do not have regulatory authority over the overall insurance landscape in the state. Thus, the crucial regulatory function is vested in the Commissioner, making this choice the correct answer.