What exactly is the role of the guaranty funds?

Guaranty funds ease the burden on policyholders and claimants of the insolvent insurer by immediately stepping in to assume responsibility for most policy claims following liquidation. They provide prompt payment of covered claims, or in many cases seamless continuation of ongoing payments, which would not be possible otherwise. The level of coverage guaranty funds provide is determined by the existing policy and by state law - they do not offer a “replacement policy.”









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