New Hampshire Life and Health Insurance Guaranty Association

The New Hampshire Life and Health Insurance Guaranty Association (NHLHIGA) is a statutory entity established in 1971 by the New Hampshire legislature under the New Hampshire Life and Health Insurance Guaranty Association Act. Its primary purpose is to protect state residents who are policyholders and beneficiaries of life and health insurance policies in the event that an insurance company becomes insolvent.

Purpose and Function

NHLHIGA provides a safety net for New Hampshire consumers by ensuring that they receive benefits from their insurance policies when a member insurer is unable to fulfill its obligations. The association is composed of member companies licensed to write life insurance, health insurance, and annuity contracts in the state. In cases of insolvency, the association manages the liquidation process through a court-appointed receiver, ensuring both continuity of coverage and payment of claims up to specific statutory limits.

Coverage Limits

The NHLHIGA is responsible for covering benefits provided by member insurers but specifies certain limits, which include:

• Life Insurance Benefits:

  • Up to $300,000 in death benefits.
  • Up to $100,000 for net cash surrender benefits.

• Health Insurance Benefits:

  • Coverage limits for health insurance are established according to the policies in effect at the time of insolvency.

It is important to note that not all policies are covered, and specific exclusions apply. The coverage is limited to policies issued by member insurers that have become insolvent.

Membership and Assessments

All insurance companies that are licensed to operate in New Hampshire and offer life and health insurance or annuity contracts are required to be members of the NHLHIGA. In the event of a member company’s insolvency, the association gathers funds from assessments on the remaining member companies, thereby facilitating the continuous coverage and claims payment for affected policyholders.

Role in Liquidation Process

When a member insurer is declared insolvent, a special deputy receiver takes control of the company to oversee the liquidation process. This includes determining the company's financial obligations and assets and ensuring that policyholders are informed of their coverage options under the guaranty association.

Legal Authority

The operations and responsibilities of the NHLHIGA are defined by the New Hampshire Life and Health Insurance Guaranty Association Act. This legislation outlines the procedures for providing coverage to policyholders, the limitations of that coverage, and the framework for the assessment of member insurers.

Conclusion

The New Hampshire Life and Health Insurance Guaranty Association plays a critical role in safeguarding the interests of residents against the risks associated with insurance company insolvencies. By providing a structured framework for claims payment and continuing coverage, the NHLHIGA helps maintain confidence in the life and health insurance market within New Hampshire.