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State Guaranty Fund

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State Guaranty Fund
A fund administered by the government of a U.S. state protecting policyholders and pensioners from the default of an insurance company. That is, if an insurance company is licensed to operate in a given state, policyholders within that state are protected because, if the company defaults on its payments, the state guaranty fund will pay the policyholder instead. Insurance companies pay a small percentage of their revenues to different states to finance state guaranty funds.


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With these heightened public concerns, agents now find themselves facing increased questions about insurer balance sheets, fiscal viability, and the protections offered by state guaranty funds.
Guaranty Funds State guaranty funds can play an important role with respect to transactions with insolvent insurance companies.
It appears annuity owners of failed National American Life and Summit National Life Insurance were 100 percent covered up to limits of their state guaranty fund and received a little over 90 cents on the dollar on account values in excess of these limits.
 
 
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