What happens when the Recovery Fund balance reaches $1,000,000?

• A. Annual license fees are no longer collected until the balance falls below $500,000
• B. All claims are halted indefinitely
• C. The fund is closed permanently
• D. Interest is credited to licensees' accounts

Answer: (A)

When the Recovery Fund balance hits a high threshold, the system aims to avoid overfunding while still keeping money available to cover future claims. Once the fund reaches one million dollars, annual license fees are paused and are not collected again until the balance falls below five hundred thousand dollars. This keeps licensee costs reasonable while ensuring there’s enough money in the fund to pay valid claims if needed.

The other options aren’t how the fund operates: the fund isn’t halted on all activity, there’s no permanent closure, and interest isn’t routinely paid out to licensees. Interest typically stays in the fund to bolster its ability to cover future claims.