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Frequently Asked Questions

What is a guaranty fund? A guaranty fund, also known as a guaranty association, protects policyholders and claimants when an insurance company becomes insolvent. Guaranty funds are nonprofit entities created by state law. Most guaranty funds were created in the 1960s as state insurance commissioners and lawmakers reacted to an increase in the number of […]

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Backgrounder

At the heart of the insurance contract lies the assurance that when misfortune happens, insurance will be there to soften the blow with coverage for one’s losses. But what happens when a property and casualty insurance company becomes financially troubled and fails? What happens to policyholders who draw on coverage written by an insolvent company? […]

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The Property and Casualty Guaranty Fund System: Supporting the Insurance Promise for 50 Years

After 50 years, the nation’s property and casualty guaranty funds system remains strong, resilient and true to its original intent of protecting policyholders by stepping in to pay covered claims of insolvent insurers. “Since the guaranty fund system was established by industry and state lawmakers five decades ago, it has performed well, meeting its obligations […]

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