Idaho - Salmon River
View All

Frequently Asked Questions

  1. What happens when my insurance company goes out of business?

    In most cases, the Association will continue coverage as long as premiums are paid or cash value exists. It may do this directly, or it may transfer the policy to another insurance company. In any case, policyholders should continue making premium payments to keep their coverage in force.

    Please note that the Association has the same rights and authority under your insurance contract as the issuing insurer. If the terms of your policy allow for cancellation, the Association may invoke such right, in accordance with the policy terms and in accordance with state laws.

  2. How is policy coverage determined?

    Coverage is determined by your policy terms and Idaho law at the time the Association is activated to provide protection (when the member insurer is found to be insolvent and ordered liquidated by a court). Because of the ever-changing nature of insurance products and relevant laws and the dramatic variations in policy language, the Association cannot make statements regarding coverage of a specific policy unless it is a policy with a company for which the association has been activated to provide protection (a company that has been placed into court-ordered liquidation).

  3. Who is protected?

    With some exceptions, the Association covers non-group life and health insurance policyholders and their beneficiaries, individuals who own annuity contracts and their beneficiaries, and persons protected by certificates of insurance issued under policies of group life or group health insurance.

  4. If I move to another state after purchasing a policy, will I still have guaranty association coverage? If so, who will provide it?

    If you purchased a policy from a company that is a member insurer of the state guaranty association where you reside, you will have coverage. Guaranty association protection is generally provided by the association in your state of residence at the date of the liquidation order regardless of where your policy was purchased. Policyholders who reside in states where the insolvent insurer was not licensed are covered, in most cases, by the guaranty association of the state where the failed company was domiciled. Your policy will not be covered in Idaho if the policy was issued at a time when the insurance company was not licensed to do business in Idaho.

  5. What is the Idaho Life & Health Insurance Guaranty Association?

    The Idaho Life and Health Insurance Guaranty Association was created by the Idaho Legislature in 1977 to protect state residents who are policyholders and beneficiaries of policies issued by an insolvent member insurance company, up to specified limits. All insurance companies (with limited exceptions) licensed to write life and/or disability insurance in Idaho are required, as a condition of doing business in the state, to be members of the Association. If a member company becomes insolvent, money to continue coverage and pay claims is obtained through assessments of the Association's other member insurance companies writing the same line or lines of insurance as the insolvent company. All 50 states, the District of Columbia, and Puerto Rico have life and health insurance guaranty associations.

  6. What contracts are covered?

    Generally, direct individual or direct group life and accident and health/disability insurance policies as well as annuity contracts owned by individuals and issued by the Association's member insurers are covered by the Association. Such coverage is limited by the terms of the Idaho Life and Health Insurance Guaranty Association Act (a link to the Act can be found in the Additional Info section).


    (Please note that the Association does not cover annuities that are not owned by individuals except in certain defined cases.)

    Some other types of insurance--such as automobile, homeowners, professional liability, medical malpractice, workers' compensation, etc.--may be protected by the Idaho Insurance Guaranty Association. That guaranty association can be reached at:

    Idaho Insurance Guaranty Association
    c/o Western Guaranty Fund Services
    1873 S Bellaire St, Ste 920
    Denver, CO 80222
    Telephone: 303.759.5066

  7. Are all policies fully protected?

    Not always. If your insurance company fails, the maximum amount of protection provided by the Association under one policy or contract of insurance is:

    Life Insurance Death Benefits: $300,000
    Life Insurance Net Cash Surrender or Net Cash Withdrawal Values: $100,000
    Major Medical Insurance Claims or Benefit Payments: $500,000
    All Non-Major Medical Disability/Health Insurance/Long Term Care Claims or Benefit Payments: $300,000
    Disability/Health Insurance/Long Term Care Net Cash Surrender or Net Cash Withdrawal Values: $100,000
    Annuity Net Cash Surrender or Net Cash Withdrawal Values: $250,000

    Coverage is also limited to $300,000 in the aggregate for all benefits, including cash values, for any one life, except for major medical coverage which is limited to $500,000.

  8. For example, if I own twoannuities worth $200,000 each and my insurance company fails, how much is protected?

    The total protection per owner per insolvent member company is $300,000. As a result, if an individual owned two $200,000 annuities with the same insolvent insurance company, the individual would have total guaranty association coverage of only $300,000.

    The value in excess of statutory coverage limits would be eligible for submission as a claim in the receivership/liquidation, and the annuity holder may be eligible to receive distributions as the company's assets are liquidated by the receiver.

  9. What will happen to my insurance coverage if the guaranty association becomes liable for my policy?

    Protection can be provided in one of several different ways. For example, a financially sound insurer may take over the troubled company's policies and assume the responsibility for continuing coverage and paying covered claims. Alternatively, the Association may provide coverage directly by continuing the insurer's policies; in some situations, the Association may work with other state guaranty associations to develop an alternative plan to provide protection for the failed insurer's policyholders. The amount of protection provided and when you receive it may depend on the particular arrangement worked out for handling the failed insurer's obligations.

    Please remember, for cancelable group or individual health/disability insurance policies, state law requires the Association to continue your coverage only for a limited time based on state insurance laws and the renewal date of your policy.

  10. When might the guaranty association provide benefits?

    If your insurer is no longer able to fulfill its obligations, ongoing benefit payments to you may be reduced or suspended by the courts in order to sort out the affairs of the financially troubled insurer. As a result, you may have to wait many months before the guaranty association is activated to provide benefit payments. Hardship provisions may be instituted by the receiver to continue benefit payments in limited circumstances.

  11. What is NOT protected by the guaranty association?

    Policies issued by insurers not licensed to do business in Idaho and policies issued when the insurer was not licensed to do business in Idaho; policy benefits the insurer does not guarantee or for which the policyholder bears the risk (such as the non-guaranteed portion of a variable life insurance policy or annuity contract); annuities not owned by individuals (except in certain defined cases); self-insured employer plans; interest rate yields that exceed an average rate; and policies or contracts issued by reciprocal insurers, mutual benefit associations, fraternal benefit societies, hospital and medical service corporations, and limited managed care plans.

    Certain, less commonly known insurance policies and arrangements not listed here are also not protected. If you are unsure about whether your policy is excluded from guaranty association protection, you should review the current Guaranty Association Act or contact our office using the Contact Us section.

  12. How will I know if my life or health insurance company has failed or is unable to fulfill its obligations to its policyholders?

    You will receive a notification from the receiver/liquidator appointed by the state insurance commissioner or director and/or the Association if your insurance company is found to be insolvent and ordered liquidated.

  13. How can I find out if my company is licensed in Idaho?

    The Idaho Department of Insurance maintains complete and current records of all insurance companies licensed to do business in the state. You can contact the Department through their Web site or at 208.334.4250.

  14. Why hasn't my agent or company told me more about the Idaho Life & Health Insurance Guaranty Association?

    State insurance law prohibits insurance agents and companies from using the existence of the Association in any advertising or solicitation. The Association is not and should not be a substitute for your prudent selection of an insurance company that is well managed and financially stable. Agents are prohibited by statute from using this website or the existence of the Guaranty Association as an inducement to purchase insurance. For more information, see our Advertising Prohibition in the Additional Info section.

  15. Where can I get advice on purchasing life, health, or annuity products?

    The guaranty association does not provide financial advice or comment on the financial condition of any particular company. You can obtain advice from captive insurance agents, independent insurance brokers, and rating agencies. Generally, captive agents sell products from a single insurer. Brokers usually can sell the products of multiple insurers.

    Rating agencies assign comparative ratings to insurers based on various criteria. Most rating agencies are paid by the insurer to do an assessment examination and to issue a rating. This is the case with the largest and most well-known agencies, such as Standard and Poor’s, A. M. Best, Moodys, and Fitch Ratings. Since the companies pay to have themselves rated, those ratings are generally available to the public without charge. One rating agency does not accept payment from the insurer being rated— You must pay to obtain its rating results.

    You may also wish to contact your state insurance department regarding information on a particular company.

  16. Are you a State agency?

    No. The guaranty association is a private entity, with its membership made up of all the life and health insurers licensed in the state (in fact, under state law an insurer must be a member of the association to be licensed to do business). The association was created by the legislature to serve as a safety net (subject to statutory limits) for residents should their life or health insurer fail. By creating the association, the legislature was able to ensure continued coverage to residents affected by their insurer’s failure. The association does work in cooperation with the Insurance Department in fulfilling its role of protecting residents whose insurance company is being liquidated.

  17. How can I determine the financial soundness of my insurance company?

    Consumers can contact the Department of Insurance (208-334-4250) to determine if an insurance company is licensed to write business in Idaho. Consumers can also check the financial strength ratings of the company, which are issued by various ratings agencies (see “Where can I get advice on purchasing life, health, or annuity products?” above).

  18. If my company is in the process of rehabilitation/conservation and I have an emergency and need to withdraw monies from my annuity, what is the process?

    Surrenders and loans may be allowed on a case-by-case basis for genuine hardship situations upon written application to the Receiver. Hardship circumstances and procedures will differ from company to company and (after liquidation) from guaranty association to guaranty association. Examples of hardship cases may include (1) terminal illness or permanent disability; (2) substantial medical expenses not covered by medical insurance; (3) financial difficulties resulting in inability to pay for essential life support needs like food and shelter; (4) imminent removal from a hospital, nursing home, or other medical care facility due to inability to pay; (5) imminent bankruptcy; and (6) immediate need for college tuition payments for a dependent child.

  19. Is long-term-care insurance covered by the guaranty association?

    Yes, long-term-care insurance is typically considered health insurance and covered by the guaranty association.

  20. Are variable annuities covered by the guaranty association?

    Generally speaking, a variable annuity contract with general account guarantees will be eligible for guaranty association coverage, subject to applicable limits and exclusions on coverage. However, specific questions regarding coverage will be determined by the applicable guaranty association based on the terms of the contract, other relevant facts, and the guaranty association law in effect at the time of liquidation.

  21. If my company is liquidated, do I have to file a claim with the association?

    If your insurance company is liquidated, you will receive a notice from the court-appointed Receiver (typically the Insurance Commissioner of the company’s state of domicile), who will oversee the liquidation of the company and inform you of any new claims procedures. There may be no change in the claims submission process—guaranty associations, working with the Receiver, sometimes continue processing claims using the liquidated company’s existing claims staff if that will maximize the speed and efficiency with which claims are processed. In other cases, the associations process the claims themselves or use an independent processing company, known as a third-party administrator, to process claims. In any event, you will be notified of the ongoing claims process. If you wish to continue coverage, you must continue to pay the premium required by your policy.

  22. Should I continue to pay my premiums?

    Yes. If you are paying premiums to your company and wish to keep your coverage in place, you must continue to do so—those premiums go to the guaranty association providing you continuing coverage. If you stop paying premiums, your insurance coverage may be terminated.

  23. Is my company covered by the guaranty association?

    The guaranty association provides coverage to owners of covered policies issued by member insurers (life, health, and annuity insurers licensed to write business in the state). To determine if a company is licensed to write business in Idaho, you may call the Department of Insurance at 208-334-4250. The Department maintains complete and current records of all insurance companies licensed to do business in Idaho. Information about companies licensed to write insurance in Idaho may also be obtained from the Department’s Web site.

  24. What happens if the benefits promised in my policy are greater than the coverage limits provided by the guaranty association?

    Guaranty associations, in conjunction with the Receiver, may be able to negotiate a transfer of a company’s policies, up to the amount of the guaranty association benefit limits, to a financially sound insurer. If an association administers claims against the policy and the benefit limits are reached, any claim in excess of that limit may be submitted as a policyholder-level claim against the estate of the failed insurance company, and the contract holder may receive distributions as the company’s assets are liquidated by the Receiver.

NOTE: This information is not intended as legal advice, and no liability is assumed in connection with its use. The applicable state guaranty association statute is the controlling authority, regardless of any information presented on this site. Users should seek advice from a qualified attorney and should not rely on this compilation when considering any questions relating to guaranty association coverage.