Insurance Guaranty Funds
http://www.iinc.org/articles/275/1/Insurance-Guaranty-Funds/Page1.html
Published on 09/16/2008
State regulators monitor the financial health of state-licensed companies through analysis of the detailed annual financial statements that insurers are required to file and periodic on-site examinations.
When a company is found to be in poor financial condition, regulators can take various actions to try to save it. Insolvencies do occur, however, despite the best efforts of regulators.
State regulators monitor the financial health of state-licensed companies through analysis of the detailed annual financial statements that insurers are required to file and periodic on-site examinations.
When a company is found to be in poor financial condition, regulators can take various actions to try to save it. Insolvencies do occur, however, despite the best efforts of regulators. All states have procedures through which the property/casualty insurance industry covers claims against insolvent insurers.
The guaranty fund system was created by policymakers and the insurance industry nearly 40 years ago and is designed to protect those least able to deal with losses associated with insurance company failure - the average citizen, small business policyholder or claimant. The guaranty fund system has safeguarded countless policyholders who might otherwise face financial ruin because of unpaid claims.
Guaranty funds pay covered claims within limits set by individual state laws and the insurance contract. Guaranty funds generally pay the amount of coverage stipulated by the policy or $300,000, whichever is less. These "caps" are fixed by state law; the guaranty funds play no role in setting coverage caps.
In total, the system has paid out about $21 billion. About $10 billion has been paid out in the last six years.
The National Conference of Insurance Guaranty Funds is a national organization, which provides assistance and support to the U.S. property and casualty guaranty funds. Property and casualty guaranty funds are active in every state, the District of Columbia, Puerto Rico and the Virgin Islands.
Since its creation in 1969, the California Insurance Guarantee Association has successfully taken over the covered claim responsibilities of more than 100 insolvent member insurers. Between the years 1969 and 2000, CIGA averaged payments of approximately $51 million per year.
Additional Resources:
National Association of Insurance Commissioners
National Organization of Life and Health Insurance Guaranty Associations
California Life and Health Insurance Guarantee Association
California Department of Insurance
Insurance Information Institute
State regulators monitor the financial health of state-licensed companies through analysis of the detailed annual financial statements that insurers are required to file and periodic on-site examinations. When a company is found to be in poor financial condition, regulators can take various actions to try to save it. Insolvencies do occur, however, despite the best efforts of regulators.
Insurance Guaranty Funds
State regulators monitor the financial health of state-licensed companies through analysis of the detailed annual financial statements that insurers are required to file and periodic on-site examinations. When a company is found to be in poor financial condition, regulators can take various actions to try to save it. Insolvencies do occur, however, despite the best efforts of regulators. All states have procedures through which the property/casualty insurance industry covers claims against insolvent insurers.
The guaranty fund system was created by policymakers and the insurance industry nearly 40 years ago and is designed to protect those least able to deal with losses associated with insurance company failure - the average citizen, small business policyholder or claimant. The guaranty fund system has safeguarded countless policyholders who might otherwise face financial ruin because of unpaid claims.
Guaranty funds pay covered claims within limits set by individual state laws and the insurance contract. Guaranty funds generally pay the amount of coverage stipulated by the policy or $300,000, whichever is less. These "caps" are fixed by state law; the guaranty funds play no role in setting coverage caps.
In total, the system has paid out about $21 billion. About $10 billion has been paid out in the last six years.
The National Conference of Insurance Guaranty Funds is a national organization, which provides assistance and support to the U.S. property and casualty guaranty funds. Property and casualty guaranty funds are active in every state, the District of Columbia, Puerto Rico and the Virgin Islands.
Since its creation in 1969, the California Insurance Guarantee Association has successfully taken over the covered claim responsibilities of more than 100 insolvent member insurers. Between the years 1969 and 2000, CIGA averaged payments of approximately $51 million per year.
Additional Resources:
National Association of Insurance Commissioners
National Organization of Life and Health Insurance Guaranty Associations
California Life and Health Insurance Guarantee Association
California Department of Insurance
Insurance Information Institute