Insurance and Financial Services. Your Financial Security Matters!

What happens if my policy value is greater than my state’s protection level?

Guaranty associations, in conjunction with the receiver, may be able to negotiate a transfer of a company’s policies, including some or all of the portions above guaranty association benefit limits, to a financially sound insurer. If an association administers the claim and reaches its benefit limit, the value in excess of that limit may be submitted

as a policyholder-level claim against the estate of the failed insurance company, and the contract holder may receive distributions as the company’s assets are liquidated by the receiver.

Why aren’t guaranty associations more widely publicized?

Most states have laws prohibiting insurance agents and companies from using the existence of the guaranty association system in any advertising or as an inducement to purchase insurance (however, in some states, a notice about guaranty protection

may be attached to your policy). A guaranty association is not and should not be a substitute for your prudent selection of an insurance company that is well-managed and financially sound.

Protection You Can Count On

Learning that your life or health insurance company is in trouble can be frightening, but policyholders can take comfort in knowing that the guaranty association safety net has been in place for decades to help them in their time of need. By providing benefits and continuing coverage to policyholders of a failed insurer, state life and health insurance guaranty associations continue to play a vital role in keeping the promises made by the insurance industry—even when a company goes out of business. Since their creation, state guaranty associations have: • Provided protection to more than 2.3 million policyholders

• Guaranteed more than $21.2 billion in coverage benefits

• Contributed more than $5.2 billion to ensure that policyholders received their benefits

When an insurance company fails, skilled guaranty association personnel work to ensure that policyholders’ claims are paid promptly and that there is no lapse in their insurance coverage. Providing this continuing coverage is a vital aspect of the life and health insurance safety net—without it, some policyholders of a failed insurer would probably have difficulty finding comparable coverage elsewhere. Instead, guaranty associations often place the policies of an insolvent insurer with a financially sound insurer. In other cases, guaranty associations simply provide covered benefits directly.

The guaranty system safety net has grown stronger through the years, gaining valuable expertise in meeting the needs of policyholders of failed insurers and adapting to new insurance products and new regulatory structures. One major step in this process was the creation of the National Organization of Life & Health Insurance Guaranty Associations (NOLHGA) in 1983. NOLHGA was created to help the state guaranty associations deal efficiently with the large-scale challenges presented by national insurance company failures, which affect policyholders in many states. The system continues to adapt to the changing financial services marketplace, with a constant goal of protecting policyholders when they need it most.

Protection You Can Count On

Learning that your life or health insurance company is in trouble can be frightening, but policyholders can take comfort in knowing that the guaranty association safety net has been in place for decades to help them in their time of need. By providing benefits and continuing coverage to policyholders of a failed insurer, state life and health insurance guaranty associations continue to play a vital role in keeping the promises made by the insurance industry—even when a company goes out of business. Since their creation, state guaranty associations have: • Provided protection to more than 2.3 million policyholders

• Guaranteed more than $21.2 billion in coverage benefits

• Contributed more than $5.2 billion to ensure that policyholders received their benefits

When an insurance company fails, skilled guaranty association personnel work to ensure that policyholders’ claims are paid promptly and that there is no lapse in their insurance coverage. Providing this continuing coverage is a vital aspect of the life and health insurance safety net—without it, some policyholders of a failed insurer would probably have difficulty finding comparable coverage elsewhere. Instead, guaranty associations often place the policies of an insolvent insurer with a financially sound insurer. In other cases, guaranty associations simply provide covered benefits directly.

The guaranty system safety net has grown stronger through the years, gaining valuable expertise in meeting the needs of policyholders of failed insurers and adapting to new insurance products and new regulatory structures. One major step in this process was the creation of the National Organization of Life & Health Insurance Guaranty Associations (NOLHGA) in 1983. NOLHGA was created to help the state guaranty associations deal efficiently with the large-scale challenges presented by national insurance company failures, which affect policyholders in many states. The system continues to adapt to the changing financial services marketplace, with a constant goal of protecting policyholders when they need it most.