State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
The California Life and Health Insurance Guarantee Association (CLHIGA) is primarily designed to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CLHIGA (Sections 1067-1067.19) is a safety-net association funded by member insurers that pays certain covered claims when a licensed life, health, or annuity insurer becomes insolvent or impaired. Coverage is subject to statutory limits per life and by line of business. It protects consumers from the failure of an insurer, not the insurer's shareholders or its investment performance.
Why the other options are wrong
- B) Investing premiums is the insurer's own function; CLHIGA exists to backstop claims after an insolvency.
- C) Rate setting is a regulatory matter, not a function of the guaranty association.
- D) Policy form approval belongs to the Department of Insurance, not to CLHIGA.
Memory hook
CLHIGA = the industry safety net that catches covered claims when an insurer falls. Consumers first.