State Case Could Shake Up Life, Annuity and LTCI Issuer Insolvencies
April 2, 2019 by Allison Bell
Life insurers are clashing with health insurers over what should happen to long-duration insurance policies when the issuers fail and state guaranty associations step in.
Health insurers want the default to be for protection to be limited to a state’s guaranty limits. They want to see receivers to get court permission before using a failed insurer’s own assets to fill in holes in guaranty fund protection.
Life insurers want the default to be for the receiver to use the insolvent insurer’s assets to fill in guaranty protection holes, to make sure the policyholders get coverage close to what the policyholders were originally promised.
Members of the National Association of Insurance Commissioners’ Receivership and Insolvency Task Force talked about receivers’ use of a failed insurer’s assets during a conference call meeting, and at an in-person meeting in November.
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