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. 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. If I move to another state after purchasing a policy, will I still have guaranty association coverage? If so, who will provide it? For more information about coverage, see the questions below or contact the guaranty association or state insurance department. Limits on benefits and coverage are established by state law. Life and health insurance guaranty associations cover individual policyholders and their beneficiaries typically, persons protected by certificates of insurance issued under policies of group life or group health insurance are also covered. All 50 states, the District of Columbia, and Puerto Rico have life and health insurance guaranty associations. If a member company becomes insolvent, money to continue coverage and pay claims is obtained through assessments of the guaranty association's other member insurance companies writing the same line or lines of insurance as the insolvent company. All insurance companies (with limited exceptions) licensed to write life and health insurance or annuities in New Jersey are required, as a condition of doing business in the state, to be members of the guaranty association. The New Jersey Life & Health Insurance Guaranty Association was created by the New Jersey legislature in 1992 (with an effective date of January 1, 1991) to protect state residents who are policyholders and beneficiaries of policies issued by an insolvent insurance company, up to specified limits. What is the New Jersey Life & Health Insurance Guaranty Association? In light of the potential for 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. In any case, policyholders should continue making premium payments to keep their coverage in force.Ĭoverage is determined by New Jersey law and policy language at the time the guaranty association is activated to provide protection (when the member insurer is found to be insolvent and ordered liquidated by a court). It may do this directly, or, most often, it may transfer the policy to another insurance company. In most cases, a guaranty association will continue coverage as long as premiums are paid or cash value exists.
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