Key Takeaways
- The Ohio Life and Health Insurance Guaranty Association protects policyholders when insurers become insolvent
- Coverage limits are $300,000 for life insurance death benefits
- Health insurance coverage is limited to $300,000 per individual
- Annuity coverage is limited to $250,000 in present value
- Producers cannot use guaranty association coverage as a selling point
Ohio Life and Health Insurance Guaranty Association
The Ohio Life and Health Insurance Guaranty Association protects Ohio residents when life and health insurance companies become insolvent (unable to pay claims).
Purpose and Function
The Ohio Guaranty Association:
- Protects policyholders of insolvent insurers
- Continues coverage or pays claims up to limits
- Is funded by assessments on member insurers
- Operates under state law supervision (ORC Chapter 3956)
How It Works
When an insurer becomes insolvent:
- State takes over - Superintendent places insurer in liquidation
- Association activates - Takes responsibility for covered policies
- Coverage continues - Up to statutory limits
- Claims paid - Benefits paid to policyholders
Coverage Limits
The Ohio Guaranty Association 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 |
| Aggregate per Life | $300,000 total |
Annuities
| Benefit Type | Maximum Coverage |
|---|---|
| Present Value | $250,000 per contract |
| Aggregate per Owner | $250,000 total |
Health Insurance
| Coverage Type | Maximum Coverage |
|---|---|
| Health Benefits | $300,000 per individual |
| Disability Income | $300,000 per individual |
| Long-Term Care | $300,000 per individual |
What Is Covered
The Ohio Guaranty Association covers:
Covered Policies
- Individual life insurance
- Group life insurance (Ohio residents)
- Annuities
- Health insurance
- Disability income insurance
- Long-term care insurance
- Medicare Supplement insurance
Not Covered
- Policies from insurers not licensed in Ohio
- Policies from insurers not members of Association
- Self-funded employer plans
- Government programs
- Surplus lines policies
- Amounts above coverage limits
- Variable portion of variable contracts
Funding
The Association is funded by assessments:
- Member insurers pay assessments
- Assessments based on premium volume in Ohio
- May be recouped through premium increases
- Maximum assessment limits apply
Producer Restrictions
Advertising Prohibition
Producers cannot:
- Use Association coverage as a selling point
- Advertise guaranty association protection
- Imply policies are "guaranteed" by the association
- Compare Association to FDIC insurance
Required Conduct
- Cannot misrepresent guaranty association coverage
- Must provide accurate information if asked
- Cannot suggest coverage exceeds actual limits
- Must comply with disclosure requirements
Exam Tip: Remember that producers CANNOT use guaranty association coverage as a selling point. This is a frequently tested rule.
Claim Process
When an insurer becomes insolvent:
- Policyholder notified by liquidator
- Coverage assessed - Association reviews policies
- Benefits continued or transferred to healthy insurer
- Claims processed within coverage limits
What is the maximum death benefit coverage provided by the Ohio Guaranty Association for a life insurance policy?
Can an Ohio insurance producer use Guaranty Association coverage as a selling point?
What is the maximum annuity coverage provided by the Ohio Guaranty Association?
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