Guaranty Funds
FAQ's- Guaranty Funds
FAQ Guaranty Funds
FAQ's- Guaranty Funds


Q. Who do I contact if I have an unpaid claim with an insolvent/liquidated insurance company?
A. If you have an existing claim at the time of insolvency, please contact APCIGF and reference your existing claim number.

Q.How do I report a new claim with an insolvent/liquidated insurance company?
A.To report a new claim, please contact the Receiver for the insolvent company to establish a new claim.  The Receiver will then refer your claim to the appropriate guaranty association. (link to tab of active liquidations) Claims are generally referred to the guaranty fund in the state where the policyholder resides.  

Q.Before my company was declared insolvent, it was defending me in a lawsuit brought under my policy. What happens now?
A.Each claim is subject to review for potential coverage.  However, in many cases APCIGF will continue to provide protection by defending the lawsuit.  APCIGF may also negotiate a settlement on your behalf, subject to the limitations in the fund statutes and policy coverage. 

Q.Where does APCIGF get the money to pay the claims?
A.APCIGF is funded by assessments of member insurers following an insolvency and, if any, the recovered and liquidated assets of the insolvent companies 

Q.Why does my insurance have to pay my claim/damages if I was not at fault?
A.Arizona law dictates that all other forms of insurance available must be exhausted before any claims may be considered by the APCIGF.  (See A.R.S. 20-673)

Q.What is a statutory deductible and how is it paid?
A.Arizona law dictates that the APCIGF will consider a covered claim that is more than $100. For example, if your covered claim value is $500, APCIGF may be able to pay $400 of your $500 claim. 


Q.What is the Arizona Life & Disability Insurance Guaranty Fund?
A.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.

Q.How does the Arizona GF provide protection when my insurance company goes out of business?
A.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.

Q.Who is covered by the Arizona GF?
A.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.

Q.What protections are provided by the Fund?
A.The basic protections provided by the Arizona GF for any one (1) life are:

  • 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.

Q.Is Long-Term Care (LTC) insurance covered?
A.Yes, long-term care insurance is typically considered disability insurance and covered by the Arizona GF.

Q.Are there limitations on the GF’s liability?
A.Yes. For example, the Arizona GF's liability is never greater than the benefits promised by the insolvent insurer.

Q.How will I know if my insurance company is declared insolvent?
A.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.

Q.Do I need to continue to pay my premiums?
A.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.

Q.Where does the GA get the money to provide this coverage?
A.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.

Q.What is NOT covered by the GF?
A.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 through 20-695) for other policies and contracts, or portions thereof, which are excluded from coverage.

FAQ's- Guaranty Funds