Key Takeaways
- The Georgia Insurers Insolvency Pool (GIGA) protects Georgia policyholders when P&C insurers become insolvent
- GIGA covers claims up to $300,000 per claimant for most covered claims
- Workers' compensation claims are covered up to statutory limits
- GIGA does not cover surplus lines policies or self-insured plans
- Producers cannot advertise or use GIGA coverage as a selling point
Georgia Insurers Insolvency Pool (GIGA)
The Georgia Insurers Insolvency Pool (GIGA) protects Georgia residents when P&C insurance companies become insolvent.
Purpose and Function
GIGA:
- Protects policyholders of insolvent P&C insurers
- Pays covered claims up to statutory limits
- Funded by assessments on member insurers
- Operates under state law supervision
How It Works
When a P&C insurer becomes insolvent:
- OCI takes over - Places insurer in receivership
- GIGA activates - Takes responsibility for covered claims
- Claims processed - GIGA pays covered claims
- Assessments made - Member insurers pay assessments
Coverage Limits
GIGA provides coverage up to specific limits:
Claim Limits
| Coverage Type | Maximum |
|---|---|
| Most Covered Claims | $300,000 per claimant |
| Workers' Compensation | Statutory limits |
| Homeowners Claims | $300,000 |
| Auto Claims | $300,000 |
| Commercial Claims | $300,000 |
Exam Tip: GIGA's $300,000 limit per claimant is identical to Texas's TPCIGA limit. This is a frequently tested figure.
Important Limitations
- $300,000 maximum per claimant
- Deductibles may apply
- Net worth reduction may apply for large commercial insureds
- Claims over limit not covered
What Is Covered
GIGA covers claims under:
Covered Policies
- Homeowners insurance
- Auto insurance
- Commercial property
- Commercial liability
- Workers' compensation
What's NOT Covered
| Not Covered | Reason |
|---|---|
| Surplus lines policies | Non-admitted insurers |
| Self-insured plans | Not insurance policies |
| Title insurance | Separate mechanism |
| Ocean marine insurance | Excluded |
| Amounts above limits | Statutory limit applies |
| Life & health | Separate guaranty association |
Funding
GIGA is funded by assessments on member insurers:
Assessment Process
- Member insurers pay assessments when needed
- Based on premium volume in Georgia
- May be recouped through rate increases
- Separate accounts by line of insurance
Assessment Accounts
| Account | Purpose |
|---|---|
| Workers' Comp Account | WC claims only |
| Auto Account | Auto claims |
| Property Account | Property claims |
| Other Account | All other claims |
Producer Restrictions
Advertising Prohibition
Producers cannot:
- Use GIGA coverage as a selling point
- Advertise guaranty association protection
- Imply policies are "guaranteed" by GIGA
- Compare GIGA to FDIC
- Suggest choosing insurer based on GIGA
Required Conduct
- Provide accurate information if asked directly
- Cannot misrepresent coverage limits
- Cannot suggest coverage exceeds actual limits
- Must not use to induce sales
Exam Tip: Producers CANNOT use GIGA coverage as a selling point. This prohibition is frequently tested.
Claims Process
When an insurer becomes insolvent:
- Notice sent - GIGA notifies policyholders
- Claims submitted - Directly to GIGA
- Claims evaluated - Within statutory limits
- Benefits paid - If claim is covered
- Policy may end - Policyholder finds new coverage
Priority of Claims
GIGA pays claims in order:
- Workers' compensation claims
- Other covered claims
- Return of unearned premiums
- Claims over limits (if funds available)
Net Worth Reduction
For insureds with high net worth:
- Coverage may be reduced or eliminated
- Encourages large companies to use other risk management
- Does not apply to workers' comp claims
- Threshold set by statute
Comparison: GIGA vs. TPCIGA
| Feature | Georgia (GIGA) | Texas (TPCIGA) |
|---|---|---|
| P&C Claim Limit | $300,000 | $300,000 |
| WC Limit | Statutory | Statutory |
| Producer Advertising | Prohibited | Prohibited |
| Surplus Lines | Not covered | Not covered |
What is the maximum coverage GIGA provides for most P&C claims?
Can a Georgia P&C producer use GIGA coverage as a selling point?
Which of the following is NOT covered by GIGA?
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