North Carolina Life-Health Insurance

The North Carolina Life & Health Insurance Guaranty Association (the "Guaranty Association") is a vital safety net for policyholders in our state. Established in 1974 by the North Carolina legislature, the Association was created to protect policyholders in the event that a member insurance company becomes insolvent. Composed of all insurers licensed to sell life insurance, accident and health insurance, and annuities in North Carolina, the Guaranty Association works tirelessly to ensure that North Carolina residents have access to vital financial protection when they need it most.

The Association's role becomes crucial when a member insurer faces financial difficulties and is ordered into liquidation by a court. At this point, a special deputy receiver takes control of the insurer, responsible for processing its assets and liabilities. The responsibility of continuing to service the insurer's policies and providing coverage to North Carolina policyholders then falls to the Guaranty Association.

The Scope of Coverage

The North Carolina Life & Health Insurance Guaranty Association Act, which forms the foundation of the Association's operations, outlines the specific types of coverage provided. This includes protection for:

• Life and health insurance policyholders: Residents of North Carolina who hold individual life or health insurance policies with an insolvent insurer receive coverage up to the limits defined in the Act.
• Certificate holders of direct group policies or contracts: Individuals enrolled in group insurance plans issued by an insolvent insurer also benefit from the Association's protection.
• Unallocated annuity contract holders: Individuals holding unallocated annuity contracts with an insolvent insurer are also eligible for coverage.

Guiding Principles and Legal Framework

The Guaranty Association's actions are guided by North Carolina law and the language of the insolvent company's policies at the time of insolvency. The Association is committed to ensuring that the information provided on its website accurately reflects the most current law. However, in the event there are any inconsistencies between the Guaranty Association Act or any other applicable laws and regulations, the legal principles will always take precedence.

Due to the complexity of insurance laws and the wide variations in policy language, the Association cannot provide definitive statements about the coverage of a specific policy unless it has been activated to provide protection for a particular company.

Policyholders facing the closure of their insurance company are encouraged to seek clarification directly from the Guaranty Association through the provided contact information.