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.
References in periodicals archive ?
12 March 2019 - Massachusetts, US-based Banyan Software, an enterprise software acquisition company has acquired California, US-based Lightspeed Data Solutions Inc., a provider of software for investment managers and insurance guaranty funds, the company said.
Schmelzer, president of (http://ncigf.org/) the National Conference of Insurance Guaranty Funds (NCIGF), has been selected to serve as chair of the (http://www.ifigs.org/) International Forum of Insurance Guarantee Schemes (IFIGS).
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.
Even though this hole was less than half filled by life guaranty funds, the receiver successfully deflected criticism in part by the existence of this safety net for consumers.
Surplus lines insurers generally do not participate in state guaranty funds and coverage may only be obtained through duly licensed surplus lines brokers.
Life insurance policyholders are covered by state guaranty funds, providing protection against losses from insurer insolvencies.
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 (NCIGF).
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$13.6801 trillion (US$441.3 billion), also the highest of its kind.
The manmade anti natural disasters of the past several years have brought new meaning to the catch phrase "safety net." 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.