The North Carolina Life & Health Insurance Guaranty Association is a statutory entity created in 1974 when the North Carolina legislature enacted the first version of the North Carolina Life & Health Insurance Guaranty Association Act (a link to the Act can be found in the Additional Info section). The guaranty association is comprised of all insurers licensed to sell life insurance, accident and health insurance, and annuities in the state of North Carolina. In the event that a member insurer is found to be insolvent and is ordered to be liquidated by a court, the Guaranty Association Act enables the guaranty association to provide protection (up to the limits spelled out in the Act) to North Carolina residents who are holders of life and health insurance policies and individual annuities with the insolvent insurer. It also provides coverage for certificate holders of direct group policies or contracts and for unallocated annuity contracts. Show
Specifically, when a member insurer is found to be insolvent and is ordered liquidated, a special deputy receiver takes over the insurer under court supervision and processes the assets and liabilities through liquidation. The task of servicing the insurance company's policies and providing coverage to North Carolina's resident policyholders becomes the responsibility of the guaranty association. The protection provided by the guaranty association is based on North Carolina law and the language of the insolvent company's policies at the time of insolvency. We will make every effort to ensure that the information provided here is in accordance with the most current law in the event that the North Carolina legislature amends the Guaranty Association Act or other laws. However, if there should be any inconsistency between the Guaranty Association Act or any other law or regulation and the information on this Web site, the relevant law will supersede. In light of these changes in law 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. Finally, this Web site is for general information purposes and should not be relied upon as legal advice. Again, we hope the information provided in this Web site is useful. Be sure to read the Frequently Asked Questions section of the site for more information, and please refer to the Contact Us section if you have any questions for the guaranty association. Rule 120-2-11-.01 Statutory AuthorityThis Regulation is made and promulgated by the Insurance Commissioner pursuant to the authority set forth in Section 33-2-9 and Chapter 33-6 of the Georgia Insurance Code. Rule 120-2-11-.02 Purpose
Rule 120-2-11-.03 DefinitionsFor the purpose of these Regulations:
Rule 120-2-11-.04 Applicability
Rule 120-2-11-.05 Form and Content of Advertisements
Rule 120-2-11-.06 Disclosure Requirements
Rule 120-2-11-.07 Identity of Insurer
Rule 120-2-11-.08 Jurisdictional Licensing and Status of Insurer
Rule 120-2-11-.09 Statements About the InsurerAn advertisement shall not contain statements, pictures, comparative financial ratios, or illustrations which are false or misleading, in fact or by implication, with respect to the assets, liabilities, insurance in force, corporate structure, financial condition, age or relative position of the insurer in the insurance business. An advertisement shall not contain a recommendation by any commercial rating system unless it clearly defines the scope and extent of such recommendation. Rule 120-2-11-.10 Misleading Statements, Representations and Illustrations Prohibited
Rule 120-2-11-.11 Enforcement Procedures
Rule 120-2-11-.12 Conflict with Other RulesIt is not intended that these rules conflict with or supersede any rules currently in force or subsequently adopted in this State governing specific aspects of the sale or replacement of life insurance including, but not limited to, rules dealing with life insurance cost comparison indices, deceptive practices in the sale of life insurance, and replacement of life insurance policies. Consequently, no disclosure required under any such rules shall be deemed to be an advertisement within the meaning of these rules. Rule 120-2-11-.13 Severability ProvisionIf any Section or portion of a Section of this Regulation or the applicability thereof to any person or circumstances is held invalid by a court of competent jurisdiction, the remainder of the rules or the applicability of such provision to other persons or circumstances, shall not be affected thereby. Rule 120-2-11-.14 PenaltiesAny insurer, or agent, counselor, representative, officer or employee of such insurer, failing to comply with the requirements of this Regulation shall be subject to such penalties as may be appropriate under the Insurance Laws of this State. Which of the following is stated in the consideration clause of a policy?The consideration clause spells out exactly how much premium payments are and when they are due. The legal consideration for a life policy consists of the application and payment of the initial premium. It may also list the effective date.
Which of the FOLLOWING must have insurable interest IN the insured?In the case of a life insurance policy, the owner of the policy must always have an insurable interest in the life of the insured. Also, if the owner of the policy is not the beneficiary then the beneficiary named in the contract would also need an insurable interest in the insured person.
Which of the following best describes the function of insurance?WHICH OF THE FOLLOWING BEST DESCRIBES THE FUNCTION OF INSURANCE? IT SPREADS FINANCIAL RISK OVER A LARGE GROUP TO MINIMIZE THE LOSS TO ANY ONE INDIVIDUAL.
What is adverse selection IN insurance?Adverse selection refers to a situation in which the buyers and sellers of an insurance product do not have the same information available. A common example with health insurance occurs when a person waits until he knows he is sick and in need of health care before applying for a health insurance policy.
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