If you purchased an insurance policy with a company that has gone out of business, you have the right to keep it regardless of what happens to the insurer. A special officer from the Georgia Guaranty Association is responsible for facilitating the transition of any active policies once they have shut down.
This level of protection was set in place by the Georgia Guaranty Association Act in 1981, and it was amended in 2012. The process is done under court supervision, and it’s meant to protect Georgia residents from any unfair treatment because of a company’s insolvency or liquidation.
What Happens When an Insurer Goes Out of Business
If an insurer decides to close up shop, the Georgia Guaranty Association will be able to keep your policy in force if the premiums have been paid and there is enough money to cover the cash value. They may cover the policy directly, or they may transfer it to another company. Regardless of what happens, you should continue to pay the premiums. The Georgia Guaranty Association has the same rights and authority as the insurance company, so they can cancel the policy if they have reason to do so.
If you live in Buford, GA, Town & Country Insurance can write many different policies, and we will be able to find a plan that will meet your needs. We can also offer it to you at a price that you can afford. Our agents can help you get the coverage you need, and we can give you advice on all the policies we offer. Just reach out to us, and we would be happy to speak with you!
Types of Policies That are Protected
While many insurance policies are protected under the act, there are some that aren’t, and there are coverage limits on each one. If the company went out of business before July 1, 2012, you could get protection for the following policies:
• Life insurance policies with up to a $300,000 death benefit and a $100,000 surrender value for each person covered.
• Health insurance claims of up to $300,000 for every covered person.
• The cash value of an annuity of up to $100,000 for every annuitant, and up to $300,000 per annuitant if it’s in the payment period.
• Up to $5 million in group annuity benefits for each annuitant.
The following protection is available if the insolvency occurred after that date:
• Life insurance policies of up to a $300,000 death benefit and a $100,000 surrender value for every insured.
• Hospital, medical, and surgical claims, as well as any major medical claims up to $500,000 for every insured.
• Disability, long-term care, or any other type of health insurance of up to $300,000 for every insured.
• Any annuity cash value of up to $250,000 for every annuitant, and up to $300,000 if it’s in the payment period.
Regardless of these limits, the amount covered can’t be greater than the original obligation of the insurance company.
If you have any questions about any insurance regulation in the state of Georgia, Town & Country Insurance can answer them for you. We’ve been serving Buford, GA for a long time, and we understand the needs of the people who live in the area. Feel free to get in touch with us so we can take care of all your insurance needs.