Frequently Asked Questions

The Georgia Life & Health Insurance Guaranty Association (GLHIGA) was created by the Georgia legislature in 1981 to protect state residents who are policyholders and beneficiaries of policies issued by an insolvent insurance company, up to specified limits. All insurance companies (with limited exceptions) licensed to write life and health insurance or annuities in Georgia are required, as a condition of doing business in the state, to be members of GLHIGA. If a member company becomes insolvent, funds to continue coverage and pay claims are obtained through assessments of GLHIGA's other member insurance companies that write the same line or lines of insurance as the insolvent company. All 50 states, the District of Columbia, and Puerto Rico have life and health insurance guaranty associations.

No. GLHIGA is a private entity, with its membership consisting of all life and health insurers licensed in the state. GLHIGA was created by the legislature to serve as a safety net (subject to statutory limits) for residents should their life or health insurers be declared insolvent. By creating GLHIGA, the legislature was able to ensure continued coverage to residents affected when their insurer is declared insolvent. GLHIGA works with the Office of the Commissioner of Insurance to fulfill its role in protecting residents whose insurance companies are being liquidated.

The law prohibits insurance agents and companies from using GLHIGA in any advertising. GLHIGA is not and should not be a substitute for your prudent selection of an insurance company that is well-managed and financially stable. Agents are prohibited by statute from using this website or the existence of GLHIGA as an inducement to purchase insurance. For more information, see the Advertising Prohibition Policy below.

The National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) helps coordinate protection efforts among state guaranty associations when an insurance company operates in multiple states.

Insurance is regulated at the state level. NOLHGA supports its member guaranty associations in protecting policyholders and in responding to external developments.

GLHIGA provides coverage to owners of covered policies issued by member insurers (life, health, and long-term care) and annuity insurers licensed to write business in the state. To determine if a company is licensed to write business in Georgia, you may call 404-656-2070 or access the Office's website. The Department maintains complete and current records of all insurance companies licensed to do business in Georgia.

Visit the Georgia Insurance Department Company Search Page or call 404-656-2070. The department maintains complete and current records of all insurance companies licensed to do business in the state.

• You will receive a notice from the court-appointed Receiver (typically the Insurance Commissioner of the insurer's state of domicile) if your insurance company is placed into liquidation. The Receiver will provide information about the liquidation process and any new claims procedures, if applicable.
• If you want to keep your insurance coverage active, continue paying your required premiums. GLHIGA will continue coverage if premiums are paid or sufficient cash value remains in the policy. Coverage may be maintained directly by GLHIGA or transferred to another insurance company.
• If the terms of your policy permit cancellation, GLHIGA may cancel the policy in accordance with policy provisions and applicable state laws.
• Regarding life insurance and long-term care, if your insurer can no longer meet its obligations, a court may reduce or temporarily suspend benefit payments while the insurer's financial affairs are resolved.
• Regarding life insurance, surrenders and loans may be allowed on a case-by-case basis for genuine hardship situations upon written application to the Receiver.

1. Insolvency is declared. A court places the insurer into liquidation.
2. Association assumes responsibility. GLHIGA takes over covered policies.
3. Notice is sent. Policyholders and claimants are contacted with instructions.
4. The claim is submitted. The claim is filed either through the association or through a servicing insurer/TPA it designates.
5. Benefits are paid (subject to limits). Payment is made within statutory caps (see the coverage limits under “Are all policies fully protected?”).

If your insurance company is liquidated, you will receive a notice from the court-appointed Receiver, who will oversee the liquidation of the company and inform you of any new claims' procedures. There may be no change in the claim's submission process—guaranty associations, working with the Receiver, sometimes continue processing claims using the liquidated company's existing claims staff if that maximizes the speed and efficiency of claims processing. In other cases, the associations process the claims themselves or use an independent processing company, known as a third-party administrator, to process claims. In any event, you will be notified of the ongoing claims process. If you wish to continue coverage, you must continue to pay the premium required by your policy.

In most cases, GLHIGA will continue coverage if premiums are paid or cash value exists. It may do this directly or, more often, transfer the policy to another insurance company. In any case, policyholders should continue making premium payments to keep their coverage in force.

Please note that GLHIGA has the same rights and authority under your insurance contract as the issuing insurer. If the terms of your policy allow cancellation, GLHIGA may exercise that right in accordance with the policy terms and applicable state laws.

Coverage from the Association can be provided in one of the following ways:

• Paying benefits as they become due while continuing the company's policies or issuing replacement policies;
• Paying for a financially sound company to take over the insolvent company's policies and assume the responsibility for continuing coverage and paying claims/benefits; or
• Working with other state guaranty associations and the liquidator of the insolvent company to develop an overall plan to provide coverage to policyholders. The amount of coverage provided and when you receive it may depend on the arrangement worked out for handling the obligations of the company that is declared insolvent.

If your insurer is no longer able to fulfill its obligations, ongoing benefit payments to you may be reduced or suspended by the courts to sort out the affairs of the financially troubled insurer. As a result of the insurance company being liquidated, you may have to wait many months before GLHIGA is activated to provide benefit payments. Hardship provisions may be instituted by the receiver to continue benefit payments.

Surrenders and loans may be allowed on a case-by-case basis for genuine hardship situations upon written application to the Receiver. Hardship circumstances and procedures will differ from company to company and (after liquidation) from guaranty association to guaranty association. Examples of hardship cases may include: (1) terminal illness or permanent disability; (2) substantial medical expenses not covered by medical insurance; (3) financial difficulties resulting in inability to pay for essential life support needs like food and shelter; (4) imminent removal from a hospital, nursing home, or other medical care facility due to inability to pay; (5) imminent bankruptcy; and (6) immediate need for college tuition payments for a dependent child.

Protection can be provided in several ways. For example, a financially sound insurer may take over the troubled company's policies and assume responsibility for continuing coverage and paying covered claims. GLHIGA may provide coverage directly by continuing the insurer's policies or issuing replacement policies with the guaranty association; in some situations, GLHIGA may work with other state guaranty associations to develop an overall plan to protect the company that is declared insolvent's policyholders. The amount of protection provided and when you receive it may depend on the specific arrangement worked out to handle the obligations of the company that is declared insolvent.

For group health and cancelable individual health insurance, state law allows the guaranty association to continue your coverage only for a limited time based on the renewal date of your policy.

The Association works hard to ensure claims and benefit payments are made as quickly as possible. However, when an insurance company becomes insolvent, benefit payments may be delayed while the Association assumes responsibility for policy and benefit administration. In some cases, courts may reduce or suspend ongoing benefit payments while the affairs of the financially troubled insurer are being resolved. As a result, it may take several months before GLHIGA is activated and benefit payments resume. In certain situations, the court-appointed receiver may establish hardship provisions to continue benefit payments for those in need during this transition period.

Life and health insurance guaranty associations cover individual policyholders and their beneficiaries; typically, people protected by certificates of insurance issued under policies of group life or group health insurance are also covered. Limits on benefits and coverage are established by state law. For more coverage information, see the questions below or contact GLHIGA or the Georgia Department of Insurance.

Generally, direct individual or direct group life, health, and long-term care insurance policies, as well as annuity contracts issued by GLHIGA's member insurers, are covered by the association. Such coverage is limited by the terms of the Georgia Life & Health Insurance Guaranty Association Act.

Types of property and casualty insurance—such as automobile, homeowners, professional liability, medical malpractice, workers' compensation, etc.—may be protected by the Georgia Insurers Insolvency Pool, which is at the same address as GLHIGA (click here).

Not always. If your insurance company is declared insolvent, the maximum amount of protection provided by GLHIGA for each type of policy—no matter how many of that type of policy you bought from your company—is set by statute:

*With respect to one life, regardless of the number of policies or contracts.

GLHIGA's liability cannot be greater than the obligations for which the insolvent insurer would have been liable but for its insolvency. GLHIGA also cannot be liable for punitive or exemplary damages.

Policies with insurers not licensed to do business in Georgia; Health Maintenance Organization (HMO) contracts; policy benefits the insurer does not guarantee or for which the policyholder bears the risk (such as the non-guaranteed portion of a variable life insurance or annuity contract); self-insured employer plans; and fraternal benefit society insurance certificates. Certain, less commonly known insurance policies and arrangements not listed here are also not protected. If you are unsure whether your policy is excluded from guaranty association protection, you should review the current Georgia Life and Health Insurance Guaranty Association Act.

Coverage is determined by Georgia law and policy language in effect when GLHIGA is activated to provide protection (when the member insurer is found to be insolvent and ordered liquidated by a court). Considering changes in the law and the dramatic variations in policy language, the association cannot make statements regarding coverage of a specific policy unless it is a policy with a company for which the association has been activated to provide protection.

Guaranty associations, in conjunction with the Receiver, may be able to negotiate a transfer of a company's policies, up to the amount of the guaranty association benefit limits, to a financially sound insurer. If an association administers a claim against the policy and the benefit limits are reached, any claim in excess of that limit may be submitted as a policyholder-level claim against the estate of the company that is declared insolvent, and the contract holder may receive distributions as the company's assets are liquidated by the Receiver.

The total annuity cash surrender protection per owner per licensed insurer is $250,000, regardless of the number of annuitants or contracts. As a result, if an individual owned three $250,000 annuities with the same insolvent licensed insurance company, GLHIGA would pay a maximum total of $250,000 in cash surrender values.

GLHIGA cannot cover any claim in excess of statutory coverage limits; however, the excess value may be eligible for submission as a policyholder's claim in the receivership court, and the owner may receive distributions as the company's assets are liquidated by the receiver.

If you purchased a policy from a company that is a member insurer of the state guaranty association where you reside, you will have coverage. Guaranty association protection is generally provided by the association in your state of residence at the date of the liquidation order, regardless of where your policy was purchased. Policyholders who reside in states where the insolvent insurer was not licensed are, in most cases, covered by the guaranty association of the state where the company that is declared insolvent was domiciled.

Yes. If you are paying premiums to your company and wish to keep your coverage in place, you must continue to do so—those premiums go to the guaranty association providing you with continuing coverage. If you stop paying premiums, your insurance coverage may be terminated.

If a member company becomes insolvent, funds to continue coverage and pay claims are obtained through assessments of the guaranty association's other member insurance companies that write the same line or lines of insurance as the insolvent company. All 50 states, the District of Columbia, and Puerto Rico have life and health insurance guaranty associations.

Consumers can contact the Office of Insurance (404-656-2070 or access the Office's website) to determine if an insurance company is licensed to write business in Georgia. Consumers can also check the company's financial strength ratings, which are issued by various rating agencies (see “Where can I get advice about purchasing life, health, or annuity products?” below).

GLHIGA does not provide financial advice or comment on the financial condition of any particular company. You can obtain advice from captive insurance agents, independent insurance brokers, and rating agencies. Generally, captive agents sell products from a single insurer. Brokers can usually sell products from multiple insurers.

Rating agencies assign comparative ratings to insurers based on various criteria. Most rating agencies are paid by insurers to conduct an assessment and issue a rating. This is the case with the largest and most well-known agencies, such as Standard & Poor's, A.M. Best, Moody's, and Fitch Ratings. Since the companies pay to have themselves rated, those ratings are generally available to the public without charge.

You may also wish to contact your state insurance department regarding information on a particular company.

Consumers can contact the Office of Insurance (404-656-2070 or access the Office's website).