The Arizona Life and Disability Insurance Guaranty Fund (Arizona GF) was established to provide some protection in the event that your life, annuity or disability insurance company becomes financially unable to meet its obligations.

The Arizona GF is authorized to provide protection in a variety of ways depending on the line of business. Some examples include paying claims, continuing coverage as long as premiums are paid, or transferring policies to another insurance company.

In general, the Arizona GF provides coverage to residents of Arizona. However, there are some circumstances in which a non-resident may be entitled to coverage, and some circumstances in which a resident of Arizona will not be entitled to coverage. Residency will be determined on the date the insurer is determined to be impaired or insolvent.

The basic protections provided by the Arizona GF for any one (1) life are lesser of the policy limit or value of the annuity, or:

• Life Insurance
  • $300,000 in death benefits
  • $100,000 in cash surrender or withdrawal values
• Disability Insurance
  •  $500,000 in health benefit plan benefits*
  •  $300,000 in disability insurance benefits
  •  $300,000 in long-term care insurance benefits
  •  $100,000 in other types of disability insurance benefits
• Annuities
  • $250,000 in the present value of annuity benefits, including net cash withdrawal and net cash surrender values.

*The maximum amount of protection for each individual, regardless of the number of policies or contracts, is $300,000, but special rules apply with regard to certain health benefit plan benefits for which the maximum amount of protection is $500,000.

Yes, long-term care insurance is typically considered disability insurance and covered by the Arizona GF.

Yes. For example, the Arizona GF's liability is never greater than the benefits promised by the insolvent insurer.

You will receive a notification from the Receiver and/or the state insurance department overseeing the company if your insurance company is found to be insolvent and ordered liquidated.

Yes. If you were paying premiums to the insurance company, you must continue to do so.  Those premiums go to the Guaranty Fund providing continuing coverage. If you stop paying premiums, your insurance coverage may be terminated.

The Arizona GF is funded by insurance companies licensed to sell life, disability, or annuity policies in Arizona. These insurance companies are automatically members of the Arizona Guaranty Fund by law. The Arizona GF also may receive funds from the Liquidator of an insolvent insurance company via a claim in the liquidation estate.

Policies with insurers not licensed to do business in Arizona; Health Maintenance Organization (HMO) contacts; Mandatory state pooling plans; Mutual assessment companies; Fraternal benefit society insurance certificates; Policies issued by a nonprofit hospital or medical service organization; 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 or annuity contract); Unallocated annuity contracts; Self-insured employer plans; policies or contracts that provide benefits under Medicare Part C or Part D; Interest rate yields that exceed an average rate based on Moody's corporate bond yield average, are some of the items not covered by the Arizona GF.  

Other Exclusions

Refer to the Act (A.R.S. 20-681, 20-682, 20-683, 20-684, 20-685, 20-686, 20-687, 20-688, 20-689, 20-690, 20-691, 20-692, 20-693, 20-694, 20-695) for other policies and contracts, or portions thereof, which are excluded from coverage.