What do residual markets serve as?

Residual markets serve as a last resort for coverage for individuals or businesses that have difficulty obtaining insurance through the standard or voluntary insurance markets. When applicants are rejected by other insurers due to factors such as high risk or pre-existing conditions, residual markets provide an essential safety net, ensuring that these individuals can still obtain necessary insurance coverage.

These markets are typically designed to help those who are underserved or unable to find adequate coverage, thereby promoting greater access to insurance. For instance, in the context of property insurance, residual markets can include programs that ensure homeowners in high-risk areas are still able to secure insurance despite their challenging circumstances. This role is critical in maintaining a level of coverage across various populations, ultimately contributing to broader social protection and stability.

The other options do not accurately reflect the purpose of residual markets. They are not intended to serve as a primary source of health insurance for all, nor are they alternatives for voluntary market premiums. Additionally, residual markets are not specifically designed for large corporations to self-insure, as they cater primarily to individuals and smaller entities facing coverage challenges.