Who can impose a penalty if you fail to notify the excess carrier of a claim?

• A. The administrative director
• B. The excess carrier
• C. The Manager of self-insurance plans
• D. The California insurance commissioner

Answer: (B)

The excess carrier is the correct choice because it has a direct stake in the claims process and the associated risks. When a claim occurs, the excess carrier relies on timely notifications to assess the situation, determine their potential liability, and manage their reserves appropriately. If the insured party fails to notify them of a claim, the excess carrier may suffer financial implications or disruptions in their risk assessment.

The penalty for failing to notify the excess carrier can arise from the terms outlined in the insurance policy itself, which typically specifies the obligations of the insured in terms of reporting claims. This enforcement often lies within the jurisdiction and control of the excess carrier, allowing them to impose penalties, deny coverage, or reject claims based on the failure to provide timely and appropriate notice.

In other options, the administrative director and the Manager of self-insurance plans may have roles in overseeing compliance and managing programs but do not have the authority to impose penalties related specifically to notification failures regarding excess carriers. The California insurance commissioner has regulatory authority, but their role is more focused on policy and compliance enforcement rather than directly imposing penalties for notification failings in excess coverage claims.