What is the primary purpose of the California Insurance Guarantee Association?

The primary purpose of the California Insurance Guarantee Association (CIGA) is to protect insureds from insurers that become insolvent. This organization serves as a safety net for policyholders in the event that an insurance company fails, ensuring that claims can still be paid even when the insurer can no longer meet its financial obligations. This protection is crucial for maintaining consumer confidence in the insurance market. When an insurance company becomes insolvent, CIGA steps in to cover claims up to certain limits, thus safeguarding policyholders against potential losses from their coverage.

The other options pertain to different functions within the insurance industry. Promoting insurance products relates to marketing and sales, which is not a role of CIGA. Regulating insurance rates falls under the purview of state insurance departments, designed to ensure rates are fair and adequate. Lastly, overseeing insurance marketing practices involves monitoring the methods through which insurance products are sold, which is also not part of CIGA's responsibilities. CIGA's specific focus on insolvency protection highlights its critical role in maintaining the stability and reliability of the insurance system for consumers.