Insurers do business in Oklahoma only after a thorough financial review.

TheOklahoma Life and Health Insurance Guaranty Association, established under Title 36 O.S. § 2025 et seq., protects policyowners of admitted insurers in Oklahoma if the insurer becomesfinancially insolvent. The association provides coverage up to statutory limits (e.g., $300,000 for life insurance death benefits, $100,000 for cash value) to ensure policyholders receive benefits despite the insurer’s insolvency.

Option A: Incorrect. A merger with a foreign insurer does not trigger Guaranty Association protection unless it leads to insolvency.

Option B: Correct. The Guaranty Association protects policyowners when an admitted insurer becomes financially insolvent.

Option C: Incorrect. Failure to meet capital surplus requirements may lead to regulatory action but does not directly trigger Guaranty Association coverage.

Option D: Incorrect. Depleting loss reserves is a financial issue but not the specific condition for Guaranty Association intervention, which requires insolvency.

This question falls under the Prometric content outline section on “State Insurance Statutes, Rules, and Regulations,” which includes knowledge of the Guaranty Association.