Who must pay the cost of the commissioner's inspection of an insurer?

The correct answer is that the insurer being examined must pay the cost of the commissioner's inspection. This requirement aligns with the principle that insurance regulators need to maintain oversight and ensure compliance within the insurance industry. When an insurer is inspected, it is essential for the regulatory body to ensure that the examination is conducted fairly and effectively. Therefore, it is appropriate for the insurer being examined to bear the financial responsibility for the costs associated with this regulatory process. This ensures that regulatory inspections can be conducted without financial impediments, promoting accountability and transparency within the insurance market.

The other options do not align with the standard practices in the insurance regulatory environment. For example, the state government typically does not bear the costs associated with inspections as it is the insurer's responsibility to facilitate these examinations. Similarly, insurance policyholders should not be held accountable for the costs of inspections, as it would place an undue burden on consumers who are merely participating in the market. Lastly, the insurance agents involved are not responsible for these costs either, as they act as representatives of the insurers and are not financial stakeholders in the regulatory examination process.