Which entity has the duty to pay an admitted insurer's claims in case of insolvency?

The correct answer is that the state government has the duty to handle the claims of an admitted insurer in the event of insolvency. In many states, including Indiana, state insurance departments work in conjunction with guaranty associations that fulfill this role. When an insurance company becomes insolvent, the state's guaranty association can step in to cover certain claims, thus protecting policyholders and ensuring that they receive benefits they are entitled to under their policies.

This system helps maintain consumer confidence in the insurance market by providing a safety net for policyholders. It ensures that individuals who have secured insurance coverage are not left without recourse simply because their insurer cannot meet its financial obligations. Given this framework, it is the responsibility of the state, through established regulatory mechanisms, to manage the claims process for policyholders when an admitted insurer faces insolvency.

The other options do not play a direct role in this process. The federal government is primarily involved in regulating interstate commerce and ensuring consumer protections at a broader level, but it does not directly manage insurance insolvency claims. While the insurance commissioner may oversee insurance companies' operations, enforcement of regulations, and potentially the liquidation process, the specific obligation to pay claims rests with the state through the guaranty associations. Policyholders themselves do not have