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Frequently Asked Questions

1. What happens when my insurance company goes out of business?

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

2. How is policy coverage determined?

   Coverage is determined by Nevada 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). As there may be changes in the law and 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.

3. What is the Nevada Life & Health Insurance Guaranty Association?

   The Nevada Life & Health Insurance Guaranty Association was created by the Nevada legislature to protect state residents who are policyholders and beneficiaries of policies issued by an insolvent insurance company, subject to exclusions and specified limits. All insurance companies and health maintenance organizations (with limited exceptions) licensed to write life and health insurance or annuities in Nevada are required, as a condition of doing business in the state, to be members of the Guaranty Association. If a member company becomes insolvent, money to continue coverage and pay claims is obtained from the insolvent estate and through assessments of the Guaranty Association's other member insurance companies writing 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.

4. Who is protected?

   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. Limits on benefits and coverage are established by state law. For more information about coverage, see the questions below or contact the Guaranty Association or the Nevada Division of Insurance.

5. If I move to another state after purchasing a policy, will I still have Guaranty Association coverage? If so, who will provide it?

   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 covered, in most cases, by the guaranty association of the state where the failed company was domiciled.

6. What contracts are covered?

   Generally, direct individual or direct group life and health insurance policies and health benefit plans as well as individual annuity contracts issued by the Guaranty Association's member insurers are covered by the association. Such coverage is limited by the terms of the Nevada Life & Health Insurance Guaranty Association Act, which can be found here.

   Types of property and casualty insurance—such as automobile, homeowners, professional liability, medical malpractice, workers' compensation, etc.—may be protected by the Nevada Insurance Guaranty Association. That guaranty association can be reached at:

   Nevada Insurance Guaranty Association
   3821 W. Charleston Blvd., Suite 100
   Las Vegas, NV, 89102
   (702) 368-0607

7. Are all policies fully protected?

   Not always. If your insurance company fails, the current maximum amount of protection provided by the Nevada Life and Health Insurance Guaranty Association for each type of policy:

   Life Insurance

   • Death benefits: $300,000
   • Cash surrender or withdrawal values: $100,000

   
   Annuities and Structured Settlement Annuities

   • Present value of annuity benefits and structured settlement annuities, including cash surrenders or withdrawal values: $250,000
   • Participants in a government retirement plan covered by an unallocated annuity as described by NRS 686.C.035: $250,000

   
   Health Insurance

   • Disability Income and long-term care insurance, including net cash surrender values: $300,000
   • Health Benefit Plan: $500,000
   • Health insurance, other than disability income, long-term care insurance or Health Benefit Plan: $100,000

   
   Please note that the maximum protection provided by the Guaranty Association to an individual for all life insurance, annuities, and structured settlement annuities with one insurer is $300,000; or for all life insurance, annuities, structured settlement annuities, and benefits for health benefit plans with one insurer, $500,000, regardless of the number of policies or contracts covering the individual.

8. For example, if I own three annuities worth $100,000 each and my insurance company fails, how much is protected?

   The total protection per owner per member company is $250,000 for all annuity contracts. As a result, if an individual owned three $100,000 annuities with the same insolvent insurance company, the individual would have total Guaranty Association coverage of $250,000. The value in excess of this statutory coverage limit would be eligible for submission as a policyholder claim in the receivership, and the annuity holder may receive distributions as the company's assets are liquidated by the receiver.

9. What will happen to my insurance coverage if the Guaranty Association becomes liable for my policy?

   Protection can be provided in one of several different ways. For example, a financially sound insurer may take over the troubled company's policies and assume the responsibility for continuing coverage and paying covered claims. The Nevada Guaranty Association may provide coverage directly by continuing the insurer's policies or issuing replacement policies with the Guaranty Association. In some situations, the Nevada Guaranty Association may work with other state guaranty associations to develop an overall plan to provide protection for the failed insurer's policyholders.

   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; for group policies, no less than 30 days and no more than 45 days; for individual cancelable policies, no less than 30 days and no more than one year.

10. What is NOT protected by the Guaranty Association?

    Policies with insurers not licensed to do business in Nevada; 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; interest rate yields that exceed an average rate; and fraternal benefit society insurance certificates are not protected by the Nevada Guaranty Association. Certain, less commonly known insurance policies and arrangements not listed here are also not protected. If you are unsure about whether your policy is excluded from Guaranty Association protection, you should review the current Guaranty Association Act, Chapter 686C.210 of the Nevada Revised Statutes.

11. How will I know if my life or health insurance company has failed or is unable to fulfill its obligations to its policyholders?

    You will receive a notification from the receiver and/or the Nevada Guaranty Association if your insurance company is found to be insolvent and ordered liquidated.

12. How can I find out if my company is licensed in Nevada?

    The Nevada Division of Insurance maintains complete and current records of all insurance companies licensed to do business in the state. You can verify a license status by searching the company in question on the Division’s Company Lookup Site.

13. Why hasn't my agent or company told me more about the Nevada Life & Health Insurance Guaranty Association?

    The law prohibits insurance agents and companies from using the Nevada Guaranty Association in any advertising. The Guaranty Association 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 the Guaranty Association as an inducement to purchase insurance. For more information, see our Advertising Prohibition.

14. Where can I get advice on purchasing life, health, or annuity products?

    The Guaranty Association 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 usually can sell the products of multiple insurers.

    Rating agencies assign comparative ratings to insurers based on various criteria. Most rating agencies are paid by the insurer to do an assessment examination and to issue a rating. This is the case with the largest and most well-known agencies, such as Standard and 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. One rating agency does not accept payment from the insurer being rated—TheStreet.com. You must pay to obtain its rating results.

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

15. Are you a State agency?

    No. The Guaranty Association is a private entity, with its membership made up of all the life and health insurers, and health maintenance organizations licensed in the state. The Guaranty Association was created by the legislature to serve as a safety net (subject to exclusions and statutory limits) for residents should their life or health insurer or health maintenance organization fail. By creating the Guaranty Association, the legislature was able to ensure continued coverage to residents affected by their insurer’s failure. The Guaranty Association works in cooperation with the Division of Insurance in fulfilling its role of protecting residents whose insurance company is being liquidated.

16. Is long-term-care insurance covered by the Guaranty Association?

    Yes, long-term-care insurance is typically covered by the Guaranty Association.

17. Are variable annuities covered by the Guaranty Association?

    Generally speaking, a variable annuity contract with general account guarantees will be eligible for Guaranty Association coverage, subject to applicable limits and exclusions on coverage. However, specific questions regarding coverage will be determined by the applicable Guaranty Association based on the terms of the contract, other relevant facts, and the Guaranty Association law in effect at the time of liquidation.

18. If my company is liquidated, do I have to file a claim with the association?

    If your insurance company is liquidated, you will receive a notice from the court-appointed Receiver (typically the Insurance Commissioner of the company’s state of domicile), who will oversee the liquidation of the company and inform you of any new claims procedures. There may be no change in the claims submission process—guaranty associations, working with the Receiver, sometimes continue processing claims using the liquidated company’s existing claims staff if that will maximize the speed and efficiency with which claims are processed. 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.

19. Should I continue to pay my premiums?

    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 continuing coverage. If you stop paying premiums, your insurance coverage may be terminated.

20. What happens if the benefits promised in my policy are greater than the coverage limits provided by the Guaranty Association?

    If an association administers claims 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 failed insurance company, and the contract holder may receive distributions as the company’s assets are liquidated by the Receiver.