(Revised 3/4/24) Updates Pursuant to the Life and Health Insurance Guaranty Association Amendment Act of 2023

# SUMMARY OF GENERAL PURPOSES, COVERAGE LIMITATIONS, AND CONSUMER PROTECTIONS # General Purposes Residents of the District of Columbia should know that licensed insurers or health maintenance organizations who sell health benefit plans, disability income insurance, long-term care insurance, life insurance, and annuities in the District of Columbia are members of the District of Columbia Life and Health Insurance Guaranty Association ("Guaranty Association"). The purpose of the Guaranty Association is to provide statutorily-determined benefits associated with covered policies and contracts in the unlikely event that a member insurer is unable to meet its financial obligations and is found by a court of law to be insolvent. When a member insurer is found by a court to be insolvent, the Guaranty Association will assess the other member insurers to satisfy the benefits associated with any outstanding covered claims of persons residing in the District of Columbia. However, the protection provided through the Guaranty Association is subject to certain statutory limits explained under the "Coverage Limitations" section, below. In some cases, the Guaranty Association may facilitate the reassignment of policies or contracts to other licensed insurance companies to keep the coverage in-force, with no change in contractual rights or benefits. # Coverage The Guaranty Association, established pursuant to the Life and Health Guaranty Association Act of 1992 ("Act"), effective July 22, 1992 (D.C. Law 9-129; D.C. Official Code § 31-5401 et seq.), provides insolvency protection for certain types of insurance policies and contracts licensed insurance companies to keep the coverage in-force, with no change in contractual rights or benefits. # Coverage The Guaranty Association, established pursuant to the Life and Health Guaranty Association Act of 1992 ("Act"), effective July 22, 1992 (D.C. Law 9-129; D.C. Official Code § 31-5401 et seq.), provides insolvency protection for certain types of insurance policies and contracts. The insolvency protections provided by the Guaranty Association are generally conditioned on a person being 1) a resident of the District of Columbia and 2) either the individual insured or an owner under a health benefit plan, disability income insurance, long-term care insurance, life insurance, or annuity contract issued by a member insurer or the individual insured under a group policy insurance contract issued by a member insurer. Beneficiaries, payees, or assignees of District insureds are also generally covered under the Act, even if they reside in another state. # Coverage Limitations The Act also limits the amount the Guaranty Association is obligated to pay. The benefits for which the Guaranty Association may become liable shall be limited to the lesser of: - The contractual obligations for which the insurer is liable or for which the insurer would have been liable if it were not an impaired or insolvent insurer; or - With respect to any one life, regardless of the number of policies, contracts, or certificates: ranty Association is obligated to pay. The benefits for which the Guaranty Association may become liable shall be limited to the lesser of: - The contractual obligations for which the insurer is liable or for which the insurer would have been liable if it were not an impaired or insolvent insurer; or - With respect to any one life, regardless of the number of policies, contracts, or certificates: - $300,000 in life insurance death benefits for any one life; including net cash surrender or net cash withdrawal values; - $300,000 in the present value of annuity benefits, including net cash surrender or net cash withdrawal values; - $300,000 in the present value of structured settlement annuity benefits, including net cash surrender or net cash withdrawal values; - $300,000 for long-term care insurance benefits; - $300,000 for disability income insurance benefits; - $500,000 for health benefit plans; - $100,000 for coverage not defined as disability income insurance; health benefit plans; or long-term care insurance including any net cash surrender and net cash withdrawal values. In no event is the Guaranty Association liable for more than $300,000 in benefits with respect to any one life (except in the event of health benefit plans in which the Guaranty Association is liable for no more than $500,000). Additionally, the Guaranty Association is not obligated to cover more than $5,000,000 for multiple non-group policies of life insurance with one owner, regardless of the number of policies owned. ### Exclusions Examples Policy or contract holders are not protected by the Guaranty Association if: vent of health benefit plans in which the Guaranty Association is liable for no more than $500,000). Additionally, the Guaranty Association is not obligated to cover more than $5,000,000 for multiple non-group policies of life insurance with one owner, regardless of the number of policies owned. ### Exclusions Examples Policy or contract holders are not protected by the Guaranty Association if: - They are eligible for protection under the laws of another state (this may occur when the insolvent insurer was domiciled in a state whose guaranty association law protects insureds that live outside of that state); - Their insurer was not authorized to do business in the District of Columbia at the time the policy or contract was issued; or - Their policy was issued by a charitable organization, a fraternal benefit society, a mandatory state pooling plan, a mutual assessment company, an insurance exchange, or a risk retention group. 2 The Guaranty Association also does not cover: - Any policy or portion of a policy which is not guaranteed by the insurer or for which the individual has assumed the risk; - Any policy of reinsurance (unless an assumption certificate was issued); - Any plan or program of an employer or association that provides life, health, or annuity benefits to its employees or members and is self-funded; - Interest rate guarantees which exceed certain statutory limitations; - Dividends, experience rating credits, or fees for services in connection with a policy; - Credits given in connection with the administration of a policy by a group contract holder; or - Unallocated annuity contracts. ## Consumer Protections To learn more about the above referenced protections, please visit either: District of Columbia Life and Health Insurance Guaranty Association www.dclifega.org 410-248-0407 District of Columbia Department of Insurance, Securities and Banking disb.dc.gov 202-727-8000 ith the administration of a policy by a group contract holder; or - Unallocated annuity contracts. ## Consumer Protections To learn more about the above referenced protections, please visit either: District of Columbia Life and Health Insurance Guaranty Association www.dclifega.org 410-248-0407 District of Columbia Department of Insurance, Securities and Banking disb.dc.gov 202-727-8000 Pursuant to the Act (D.C. Official Code § 31-5416), insurers are required to provide notice to policy and contract holders of the existence of the Guaranty Association and the amounts of coverage provided under the Act. Your insurer and agent are prohibited by law from using the existence of the Guaranty Association and the protection it provides to market insurance products. You should not rely on the insolvency protection provided under the Act when selecting an insurer or insurance product. If you have obtained this document from an agent in connection with the purchase of a policy or contract, you should be aware that such delivery does not guarantee that the Guaranty Association will cover your policy or contract. Any determination of whether a policy or contract will be covered will be determined solely by the coverage provisions of the Act. This disclosure is intended to summarize the general purpose of the Act and does not address all the provisions of the Act. Moreover, the disclosure is not intended and should not be relied upon to alter any rights established in any policy or contract or under the Act. 3