State guaranty funds
exist to cover unpaid claims of insolvent insurers, but these guaranty funds
are generally limited in the coverage they provide to certain types of insurance and with thresholds of the amounts they can pay.
UnitedHealth appears to be one of the health insurers that would like to see life and annuity product issuers play a bigger role in helping state guaranty funds
shoulder the burden of protecting long-term care insurance policyholders against insolvencies involving issuers such as Penn Treaty.
The purpose of guaranty funds
should not be to provide policyholders with benefits or premiums unsustainable in the market, but to provide continuation of coverage," Reichel wrote.
New York has guaranty funds
covering claims against failed property/casualty, auto, workers' compensation and life insurance companies (their adequacy and fairness is another issue), but not for health insurance policies unless issued by a NY licensed life insurer --which does not include Health Republic or most other health plans.
Seven non-life insurance companies became insolvent in the second quarter of 2013--two more than the total number of liquidations in 2012, shows a report by the National Conference of Insurance Guaranty Funds
Over recent decades, guaranty funds
have been introduced when a country's insurance sector has assisted, in a cooperative effort with the regulator, in the liquidation of one (or more) defaulting companies.
The comprehensive Executive Life of New York (ELNY) liquidation plan involving the capacity a majority state guaranty funds
, top regulators in multiple states, millions upon millions in life insurance company coffers, and thousands of waiting policyholders has cleared a major obstacle with the dismissal of the appeal by a group of annuitants claiming the liquidation plan was unfair and they were denied due process.
Based on the rules governing the re-house firms, each new outlet of the re-house firms has to turn in operating guaranty of NT$250,000 (US$8,065) to the Real Estate Agents Transaction Guaranty Foundation and at the end of 2010 such guaranty funds
accumulated to NT$13.
The summer of 2006 gave us a significant education in Property and Casualty Guaranty Funds
101 with the insolvency of three related property and casualty insurers.
During the same period customers of a little over a dozen interstate annuity carriers received cash from state guaranty funds
Additionally, RRGs do not participate in the system of state guaranty funds
nor do their policyholders receive the financial backstop ensured by participation in guaranty funds
This paper evaluates guaranty funds
and solvency regulations.