Key Takeaways
- The Georgia Life and Health Insurance Guaranty Corporation protects policyholders when insurers become insolvent
- Life insurance death benefit coverage is limited to $300,000 per life
- Health insurance coverage is limited to $500,000 per individual
- Annuity present value coverage is limited to $250,000 per contract owner
- Producers cannot use guaranty corporation coverage as a selling point
Georgia Life and Health Insurance Guaranty Corporation
The Georgia Life and Health Insurance Guaranty Corporation protects Georgia residents when life and health insurance companies become insolvent (unable to pay claims).
Purpose and Function
The Guaranty Corporation:
- Protects policyholders of insolvent insurers
- Continues coverage or pays claims up to statutory limits
- Is funded by assessments on member insurers
- Operates under Title 33, Chapter 38
How It Works
When an insurer becomes insolvent:
- Court orders liquidation - Insurer placed in receivership
- Guaranty Corporation activates - Takes responsibility for covered policies
- Coverage continues - Up to statutory limits
- Claims paid - Benefits paid to policyholders
Coverage Limits
Georgia Guaranty Corporation provides coverage up to specific limits:
Life Insurance
| Benefit Type | Maximum Coverage |
|---|---|
| Death Benefit | $300,000 per life |
| Cash Surrender Value | $100,000 per policy |
| Present Value (total) | $300,000 per life |
Annuities
| Benefit Type | Maximum Coverage |
|---|---|
| Present Value | $250,000 per contract owner |
| Multiple Annuities | $250,000 total per owner |
Health Insurance
| Coverage Type | Maximum Coverage |
|---|---|
| Health Benefits | $500,000 per individual |
| Disability Income | $300,000 per individual |
| Long-Term Care | $300,000 per individual |
Exam Tip: Georgia's life insurance death benefit limit is $300,000, lower than some other states. Know these limits for the exam.
What Is Covered
The Guaranty Corporation covers:
Covered Policies
- Individual life insurance
- Group life insurance (Georgia residents)
- Annuities
- Health insurance
- Disability income insurance
- Long-term care insurance
- Medicare Supplement insurance
Not Covered
- Policies from insurers not licensed in Georgia
- Policies from insurers not members of the Corporation
- Self-funded employer plans
- Government programs
- Surplus lines policies
- Unallocated annuity contracts
- Amounts above coverage limits
- Investment products without insurance guarantees
Funding
The Guaranty Corporation is funded by assessments:
- Member insurers pay assessments based on premium volume
- Assessments may be passed on to policyholders
- Maximum assessment: 2% of premium volume per year
- May be recouped through rate increases
Producer Restrictions
Advertising Prohibition
Producers cannot:
- Use Guaranty Corporation coverage as a selling point
- Advertise Guaranty Corporation protection
- Imply policies are "guaranteed" by the Corporation
- Compare to FDIC or other government insurance
- Suggest insurer insolvency doesn't matter because of coverage
Penalties
| Violation | Penalty |
|---|---|
| Using as selling point | License suspension/revocation |
| False advertising | Fines up to $10,000 |
| Misleading statements | Disciplinary action |
Required Disclosures
- Cannot misrepresent guaranty coverage
- Must provide accurate information if asked
- Cannot suggest coverage exceeds actual limits
- Cannot downplay insurer financial condition
Exam Tip: Remember that producers CANNOT use guaranty corporation coverage as a selling point. This is frequently tested.
What is the maximum death benefit coverage provided by the Georgia Life and Health Insurance Guaranty Corporation?
Can a Georgia insurance producer use Guaranty Corporation coverage as a selling point?
What is the maximum annuity present value coverage per contract owner under Georgia's Guaranty Corporation?
You've completed this section
Continue exploring other exams