Insurance coverage will continue and policy claims will be covered and paid by state insurance guaranty associations, subject to statutory coverage limits, which will either pay them directly or transfer the policies to a financially stable insurance company. You are required to continue to pay any premiums due under your policy in order to be eligible for coverage under your policy from your state insurance guaranty association.
Each state in which National States was licensed to do business has created a life and health guaranty association to provide protection for policyholders and beneficiaries of insolvent insurance companies, like National States, subject to certain statutory limitations. To the extent your policy is covered by a guaranty association, your policy shall continue in force for such period and under such terms as is provided by your guaranty association’s enabling statute and other applicable laws. Coverage provided by the guaranty associations will be subject to certain statutory caps and limitations applicable to each guaranty association. In order to ensure the continuation of any coverage to be provided by your guaranty association, you must continue to pay premium for the period of such coverage. Failure to make such premium payments could result in termination of coverage.
For more information about life & health guaranty associations, please visit www.nolhga.com
If you are a National States policyholder or certificate holder and have a claim arising under a National States policy, please continue to submit those to National States per the terms of your policy. The Liquidator has entered into a Court approved Service Agreement with the National Organization of Life and Health Insurance Guaranty Associations ("NOLHGA"), pursuant to which the Liquidator will provide to the guaranty associations claims processing and other administrative functions required in order for payment to be made on those claims which qualify as covered obligations of the affected guaranty association.
Pursuant to the Judgment, policyholders, certificate holders and beneficiaries need not file a proof of claim for benefits and other amounts due under National States policies.
Will policies be cancelled in liquidation?
No, not if the policy is a guaranteed renewable policy, it will not be cancelled. Remember, however, that if the policyholder does not pay the premium as it becomes due, the policy will be cancelled. A policyholder MUST pay any premium due to continue the policy. However, if a policy is a cancellable form, it may be canceled by the guaranty association post liquidation.
Is long-term care insurance covered by the insurance guaranty associations?
Yes, long-term care insurance is considered health insurance for guaranty coverage purposes.
Will my claims be paid in full by the insurance guaranty associations?
State insurance guaranty associations have maximum benefit limits. These limits are established by state law and can vary from state to state. You may access more information regarding specific state guaranty associations at www.nolhga.com.
If my policy benefits are higher than the state guaranty fund benefit limits, do I lose the difference in coverage?
While it has not been determined how claims above state guaranty fund benefit limits will be treated in the liquidation, losses in excess of guaranty association benefit limits may be eligible for submission as a policyholder claim against National States.
Should I keep paying my premiums?
If you are paying premiums to National States, you must continue to do so even after National States goes into liquidation. Those premiums go to the guaranty association providing you continuing coverage, and if you stop paying premiums, your insurance benefits may be terminated.
Will my claim be paid?
All claims will continue to be paid in accordance with the terms of your policy. You must continue to pay your policy premium when due to continue the coverage afforded by your policy. All claims will be subject to benefit limits set by the state guaranty association providing coverage for your policy.
How long will it take for my claims to be paid by the insurance guaranty association?
When a company is placed into liquidation, the state insurance guaranty associations are typically activated to pay claims as soon as the court orders the liquidation. Claim payments usually begin within 90 days after the liquidation order is issued. However, the waiting period from the time of submission will vary based on the number of claims received, and the time claims are submitted.
As a policyholder or certificate holder, do I need to file a Proof of Claim ("POC") with the Liquidator?
No. If you are a National States policyholder or certificateholder and have a claim arising under a National States policy, please continue to submit those to National States per the terms of your policy. The Liquidator has entered into a Court approved Service Agreement with the National Organization of Life and Health Insurance Guaranty Associations ("NOLHGA"), pursuant to which the Liquidator will provide to the guaranty associations claims processing and other administrative functions required in order for payment to be made on those claims which will qualify as covered obligations of the affected guaranty association. For the most part, the transition for the payment of life and health claims from National States to the state insurance guaranty associations will be seamless.
Who can I call if I have questions?
You should continue to address your questions about your life and health policy to Policyholder Services at 800-868-6788.
What is a life & health insurance guaranty association?
Life & health insurance guaranty associations were created to protect state residents who are policyholders and beneficiaries of policies issued by a life or health insurance company that has gone out of business. Each state in which National States was licensed to do business has a life and health guaranty association to provide protection for policyholders and beneficiaries of insolvent insurance companies, like National States, subject to certain statutory limitations.
All insurance companies (with limited exceptions) licensed to write life and health insurance or annuities in a state are required to be members of the state’s life and health insurance guaranty association. If a member company becomes insolvent (goes out of business), the state insurance guaranty associations continue the coverage and pay the claims under the insolvent insurer’s policies, subject to statutory limits and conditions on coverage, and are entitled to the ongoing insurance premium for those policies. An insurance guaranty association obtains funds to meet its obligations by assessing the member companies.
For more information about life & health guaranty associations, please visit www.nolhga.com
To view the Notice of Liquidation and Frequently Asked Questions mailed to policyholders, click on the following links: