Illinois Insurance Facts Insurance Guaranty Associations Revised February 2002

If you are an Illinois resident insured by a licensed insurance company or health maintenance organization that becomes bankrupt, part or all of your covered claims may be paid by an insurance guaranty association. Guaranty associations are established by state law to pay the covered claims of policyholders and other claimants of an insolvent company. Illinois has three insurance guaranty associations:

1. the Illinois Insurance Guaranty Fund covers most property and casualty insurance;
2. the Illinois Life and Health Insurance Guaranty Association covers life and health insurance, supplemental contracts and annuities; and
3. the Illinois Health Maintenance Organization Guaranty Association covers health benefits provided by HMOs.

Guaranty associations are funded through assessments to licensed insurance companies. The amount each company or HMO must pay depends on how much insurance of the same type it writes in Illinois. Assessments are made only after a court determines that an insurer or HMO is insolvent and cannot pay all its claims.

How Much Must the Guaranty Association Pay?

State law limits the amount a guaranty association must pay to a person presenting a claim to an insolvent insurer. The maximum payments to individuals allowed by Illinois law are:

Property/Casualty Fund

• $300,000 for most covered claims, except workers compensation
• No limit on covered workers compensation claims
• $10,000 refund of unearned premium, subject to a $100 deductible

Life/Health Association

• $300,000 in life insurance death benefits on any one life, regardless of the number of contracts issued by the company in liquidation;
• $100,000 in life insurance net cash surrender and net cash withdrawal values;
• $300,000 in covered health insurance benefits for any one claim;
• $100,000 in present value per annuitant;
• $5,000,000 in present value per unallocated group annuity

HMO Association

• $300,000 in covered health benefits

How Do I File a Claim?

A court-appointed receiver for the insurance company or HMO will notify you about how to file a claim and how long you have to do it. Pay close attention to filing deadlines mentioned in the notice.

How Do I Contact the Guaranty Funds?

Illinois HMO Guaranty Association
8420 W. Bryn Mawr Avenue, Suite 550
Chicago, Illinois 60631
(773) 714-8050

Illinois Insurance Guaranty Fund
120 S. LaSalle Street, Suite 1910+C337
Chicago, Illinois 60603
(312) 422-9700

Illinois Life & Health Guaranty Association
8420 W. Bryn Mawr Avenue, Suite 550
Chicago, Illinois 60631
(773) 714-8050
http://www.ilhiga.org

For More Information