CIGA insures which entities?

CIGA insures which entities?

• A. Insolvent insurance companies.
• B. Private self-insured employers.
• C. Public agencies.
• D. Non-profit organizations.

Answer: (A)

CIGA exists to protect policyholders when an insurance company becomes insolvent. When a member insurer fails, CIGA pays the claims that would have been paid by that insurer, up to statutory limits, for the policyholders and beneficiaries of the insolvent company. It’s funded by assessments on solvent member insurers, not by private self-insured employers, public agencies, or non-profit organizations. So the protective coverage applies to the policyholders of insolvent insurers, not to the entities that self-insure or to government or non-profit entities.

CIGA exists to protect policyholders when an insurance company becomes insolvent. When a member insurer fails, CIGA pays the claims that would have been paid by that insurer, up to statutory limits, for the policyholders and beneficiaries of the insolvent company. It’s funded by assessments on solvent member insurers, not by private self-insured employers, public agencies, or non-profit organizations. So the protective coverage applies to the policyholders of insolvent insurers, not to the entities that self-insure or to government or non-profit entities.