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Frequently Asked Questions
Guaranty Funds and Associations
Q: What is a Guaranty Fund or Association?
A: All 50 states, Puerto Rico, the U.S. Virgin Islands (Property and Casualty only) and the District of Columbia have a "safety net" in place for the payment of covered claims arising from the insolvency of an insurer licensed to do business in that state or jurisdiction. Normally, for property and casualty business they are referred to as "Guaranty Funds" and for life and
health they are typically referred to as "Guaranty
Associations."
Five states provide a guaranty mechanism for HMO's. In the case of life/health insurance, the Guaranty Association also provides for the continuation of eligible contracts that would otherwise terminate because of the insolvency. Coverage may vary slightly from state to state. You should contact your state's Guaranty Fund or Association to determine whether it provides coverage as a result of the liquidation of your insurer and, if so, the level of coverage provided.
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Q: Where does the funding for the Guaranty Fund or Associations come from?
A: Insurance Guaranty Funds and Associations obtain the funds necessary to pay claims by assessing solvent members of the insurance industry writing similar lines of insurance in the state on a licensed basis.
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Q: How can I contact the Illinois Guaranty Fund and Associations?
A: The Illinois Insurance Guaranty Fund is located at:
120 South LaSalle Street, Suite 1910
Chicago, Illinois 60603
Phone (312) 422-9700
Fax (312) 422-9750
The Illinois Life & Health Insurance Guaranty Association is located at:
8420 W. Bryn Mawr Avenue, Suite 550
Chicago, Illinois 60631
Phone (773) 714-8050
Fax (773) 714-8052
The Illinois Heath Maintenance Organization Guaranty Association is located at:
8420 W. Bryn Mawr Avenue, Suite 550
Chicago, Illinois 60631
Phone (773) 714-8050
Fax (773) 714-8052
If you are not an Illinois resident, please see
our off-site links for assistance in locating your guaranty
fund/association.
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Q: What does the Illinois Insurance Guaranty Fund cover?
A: You should contact your attorney or the Guaranty Fund regarding the extent of its coverage, if any, for claims arising from the liquidation of your insurer.
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Q: What about the $100 deductible on my unearned premium paid by the fund, or if my unearned premium is over $10,000?
A: You may file a proof of claim with the Liquidator in the amount of the deductible or premium not covered by the Fund.
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Q: I have a claim in excess of the amount the Guaranty Fund or Association will pay, or it is not covered by the Guaranty Fund or Association, what do I do?
A: You may file a proof of claim with the Liquidator. If this is a previously unreported claim, or you have not received a proof of claim form from our office within 120 days of the liquidation date, please go to the
"Proof of Claim Form" button on the home page.
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Q: What products are covered by the Illinois Life & Health Insurance Guaranty Association?
A: Life, health and annuity policies and contracts are covered by the Guaranty Association. Generally, with respect to covered claims, the Guaranty Association has the option of discharging its obligations either directly or by transferring the business into another solvent insurer for purposes of providing continuing coverage.
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Q: What is covered by the Illinois Health Maintenance Organization Guaranty Association?
A: You should contact your attorney or the Illinois HMO Guaranty Association regarding the extent of its coverage, if any, for claims arising from the liquidation of your insurer.
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Q: Are claims against an insolvent workers' compensation self-insurance pool covered by the
Illinois Insurance Guaranty Fund?
A: No. The Illinois Insurance Guaranty Fund does not cover these self-insured entities. However, the Illinois Insurance Code established the Group
Workers' Compensation Pool Insolvency Fund. The Insolvency Fund can be activated whenever the Director of Insurance shall determine that compensation or medical services provided by the Act may be unpaid by reason of default of an insolvent pool. If you are interested in pursuing a claim against the fund you should contact the Department of Insurance at (217) 782-2867.
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Q: I have a claim against one of the former syndicates on the Illinois Insurance Exchange
(INEX). Will the Illinois Insurance Guaranty Fund pay this?
A: No. The Illinois Insurance Guaranty Fund does not cover these entities. However, the Illinois Insurance Exchange
(INEX) established a non-statutory Guaranty Fund with monies contributed by the exchange members to help pay the unpaid claims of insolvent syndicates. For more information regarding the Exchange's Guaranty Fund, you may call the Exchange
(INEX) at (312) 372-4639 or
click here to view their website.
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Q: I am having problems with one of the Funds/Associations, can you help me?
A: In most cases no. While we attempt to provide the
Guaranty Funds and Associations with any information we possess,
in most cases we cannot intercede on your behalf. If your
problem involves an Illinois Guaranty Fund or Association you
may, however, contact the Department of Insurance Consumer
Services Division at (217) 782-1515 (Springfield) or (312)
814-2420 (Chicago), or
click here
to view their website.
If you are not an Illinois resident, please
click here for assistance in contacting your Department of
Insurance.
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Q: Do I need to file a proof of claim form with your office in order to get Guaranty Fund or Association protection?
A: Some state Guaranty Funds and Associations require that you file a proof of claim with the Liquidator. The Illinois Guaranty Fund and Associations do not require this. You should contact your state's Guaranty Fund or Association for further information.
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Q: Do I need to contact the Guaranty Fund or Association?
A: Until the Liquidator has sent the claim files, unearned or return premium data and other information to the Guaranty Funds, they will not be in a position to inform you of whether your claim is or is not a covered claim.
When the Guaranty Fund is in a position to determine if and when your loss claim will be paid, the Guaranty Fund will contact you. For a return premium claim, the Guaranty Fund may require you to complete some paperwork. You can contact them in about six months after the liquidation date to request any forms that the Guaranty Fund requires a claimant to complete for a return premium claim.
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