You are here:HomeNews CenterInsurance News2007Guaranty Association Model Act to be Considered by NCOIL

Guaranty Association Model Act to be Considered by NCOIL

On November 16, the Property-Casualty Insurance Committee of the National Conference of Insurance Legislators (NCOIL) will consider consider a proposed Post-Assessment Property and Liability Insurance...
November 14, 2007

On November 16, the Property-Casualty Insurance Committee of the National Conference of Insurance Legislators (NCOIL) will consider consider a proposed Post-Assessment Property and Liability Insurance Guaranty Association Model Act, sponsored by Committee Chair Senator Ruth Teichman (KS). The model law would create a comprehensive, statutory remedy for paying the claims of certain insureds after their property-casualty insurers have been declared insolvent. 

The model would, among other things, 1) provide for the creation of an Insurance Guaranty Association and Board of Directors; 2) establish limits regarding the net worth of insureds as related to their ability to receive guaranty fund payments; 3) establish limits on the amount of any individual guaranty fund claims payment; 4) set a bar date beyond which claims could not be filed; 5) set forth various powers and duties of an Association, as well as of a commissioner; 6) establish consistent provisions that would activate an Association's payment of claims; 7) affirm that an Association should pay out no more than an insolvent insurer would have; and 8) address issues regarding an Association's right to intervene in a claims proceeding, the finality of Association claims determinations, and immunity for an Association and others.

What It Means to Agents:  PIA will continue to monitor the development of this model, paying particular attention to any provision that might affect the procedures for ensuring that insurance producers are properly compensated for their services in the event of carrier insolvency.