Life and Health Insurance Guaranty Association Model Act

What this document is

Life and Health Insurance Guaranty Association Model Act is a naic model law published by National Association of Insurance Commissioners (NAIC). It is one of the documents that insurance license exam questions are written from, including life & health practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• NAIC Model #520: Section 2 (Purpose)

  “The purpose of this Act is to protect, subject to certain limitations, the persons specified in Section 3A against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in Section 3B, because of the impairment or insolvency of...”

• NAIC Model #520: Section 3B(2)(b) (exclusions from coverage)

  “A policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract;”

• NAIC Life and Health Insurance Guaranty Association Model Act § 19A (prohibited advertisement of the Act in insurance sales)

  “No person, including a member insurer, agent or affiliate of a member insurer shall make, publish, disseminate, circulate or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other...”

• NAIC Model NAIC 520: Section 3C (Coverage and Limitations)

  “With respect to one life, regardless of the number of policies or contracts: (i) $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance;”

• NAIC Model NAIC 520: Section 7 (Board of Directors)

  “A “public representative” may not be an officer, director or employee of an insurance company or a health maintenance organization or any person engaged in the business of insurance.”

• NAIC Model NAIC 520: Section 18 (Stay of Proceedings; Reopening Default Judgments)

  “As to judgment under any decision, order, verdict or finding based on default the Association may apply to have such judgment set aside by the same court that made such judgment and shall be permitted to defend against such suit on the merits.”

• NAIC Life and Health Insurance Guaranty Association Model Act § 9I(1) (protest of an assessment)

  “A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the Association. The payment shall be available to meet Association obligations during the pendency of the protest or any subsequent...”

• NAIC Life and Health Insurance Guaranty Association Model Act § 8A (powers of the Association when a member insurer is impaired)

  “If a member insurer is an impaired insurer, the Association may, in its discretion, and subject to any conditions imposed by the Association that do not impair the contractual obligations of the impaired insurer and that are approved by the commissioner: (1) Guarantee, assume, reissue, or reinsure,...”

• NAIC Model #520, Section 8C (Powers and Duties of the Association)

  “Nonpayment of premiums within thirty-one (31) days after the date required under the terms of any guaranteed, assumed, alternative or reissued policy or contract or substitute coverage shall terminate the Association’s obligations under the policy, contract, or coverage under this Act with respect...”

• NAIC Model #520, Section 8E (Powers and Duties of the Association)

  “The protection provided by this Act shall not apply where any guaranty protection is provided to residents of this State by the laws of the domiciliary State or jurisdiction of the impaired or insolvent insurer other than this State.”

• NAIC Model #520, Section 8P (Powers and Duties of the Association)

  “Where the Association has arranged or offered to provide the benefits of this Act to a covered person under a plan or arrangement that fulfills the Association’s obligations under this Act, the person shall not be entitled to benefits from the Association in addition to or other than those provided...”

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Questions about this source

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