What is a common characteristic of statutory insurance?

Statutory insurance is defined by its legal requirement for individuals or businesses to obtain certain types of coverage as mandated by law. This characteristic ensures a baseline level of protection for the public and entities involved, thereby promoting financial security and accountability within the market. For instance, in many jurisdictions, auto insurance is a legal requirement for drivers, while workers' compensation insurance is required for employers to cover employee injuries.

The nature of statutory insurance means it is not voluntary; consumers must comply with the law to avoid penalties. Furthermore, it is not limited to just personal or business insurance, but can encompass various types of coverage dictated by specific regulations. Thus, the defining characteristic of statutory insurance being regulated and required by law makes it critically important for maintaining structures of risk management within society.