State RegulationsNC specificDifficulty 2/5
Which of the following is NOT protected by the North Carolina Life and Health Insurance Guaranty Association when an insurer fails?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under G.S. 58-62-21(c), the Association does not cover self-funded or uninsured arrangements such as MEWAs, minimum premium plans, stop-loss coverage, and administrative-services-only contracts, because there is no insolvent insurer to stand behind the promise. The Association protects policyholders and certificate holders of licensed member insurers, so ordinary individual life and annuity contracts and group certificates are covered.
Why the other options are wrong
- B) An individual life policy from a licensed member insurer is core guaranty association protection under Article 62.
- C) Individual annuity contracts issued by member insurers are covered, subject to the applicable dollar limits.
- D) Certificates issued under a member insurer's group policy are protected for the certificate holder within the statutory limits.
Memory hook
No insurance policy, no guaranty: self-funded plans stand alone.