Illinois Life and Health Insurance Guaranty Association Information

The Association is a statutory entity created in 1980 by the Illinois General Assembly when it enacted the Illinois Life and Health Insurance Guaranty Association Act. The Association is an unincorporated association of those insurance companies (member insurers) that are licensed to write life insurance policies, health insurance policies, annuity contracts, unallocated annuity contracts and contracts supplemental thereto, in the State of Illinois. It was created to assure the fulfillment of covered policy obligations of member insurers which are determined to be insolvent and ordered liquidated by a court of competent jurisdiction. The purpose of the Association is to protect policyholders and their beneficiaries covered by the Act (usually Illinois residents) in the event of the insolvency of a member insurer, by the payment of benefits or continuation of coverage, subject to certain statutory limits. Specifically, when a member insurer is found to be insolvent and is ordered liquidated, the domestic state regulator, acting as liquidator, takes over the insurer under court supervision, marshals (collects or gathers) the assets and pays off the liabilities in a legal proceeding known as "liquidation. The task of servicing the insurance company's policies and providing coverage to Illinois-resident policyholders who are eligible for guaranty association protection becomes the responsibility of the Association. The protection provided by the Association is based on Illinois law and on the language of the insolvent company's policies at the time of insolvency. This Web site is for general information purposes and should not be relied upon as legal advice.