Insurance Dept.

General Agency, Board or Commission Rules

Chapter 43: Wyoming Life and Health Insurance Guaranty Association Notice

Effective Date: 10/19/2012 to 01/08/2015

Rule Type: Superceded Rules & Regulations

Reference Number: 044.0002.43.10192012

CHAPTER 43

WYOMING LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION NOTICE

Section 1. Authority

This regulation is issued pursuant to the authority vested in the Wyoming Insurance Commissioner under W.S. 26-2-110 and W.S. 26-42-116 of the Wyoming Insurance Code and W.S. 16-3-101, et seq. of the Wyoming Administrative Procedure Act.

Section 2. Purpose

The purpose of this regulation is to implement Chapter 42 of the Wyoming Insurance Code, also known as the Wyoming Life and Health Insurance Guaranty Association Act.

Section 3. Applicability and Scope

This regulation applies to every member insurer in the Wyoming Life and Health Insurance Guaranty Association as defined in W.S. 26-42-102(a)(vii).

Section 4. Notices

Pursuant to W.S. 26-42-116 the Insurance Commissioner hereby promulgates this regulation in order to establish the form and content of the disclaimer (Appendix A), the summary document describing the general purposes and current limitations of the Association (Appendix A), and the notice required to be used when a policy is not covered by the Guaranty Association (Appendix A).

Appendix A is to be used by each insurer and shall be given to each insured either prior to or at the time of delivery of the policy or contract. If the policy is not covered by the Association, no insurer or agent shall deliver a policy or contract unless the insurer or agent prior to or at the time of delivery gives the policyholder or contract holder the appropriate notice as found in Appendix A, which clearly discloses that the policy is not covered by the Association.

Appendix A contains an address and telephone number for the Wyoming Life and Health Insurance Guaranty Association and for the Wyoming Insurance Department. Should the address or telephone number change, the Wyoming Life and Health Insurance Guaranty Association will send written notice to each member insurer. Upon receipt of an updated notice, each insurer shall deliver an updated notice to each policyholder or contract holder to whom the insurer sent a previous notice, found in appendix A.

Section 5. Separability

Any section or provision of this regulation held by a court to be invalid or unconstitutional shall not affect the validity of any other section or provision of this regulation.

Section 6. Effective Date

This regulation shall be effective upon filing with the Secretary of State.

Appendix A

NOTICE CONCERNING COVERAGE

LIMITATIONS AND EXCLUSIONS UNDER THE WYOMING LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION ACT

Residents of Wyoming who purchase life insurance, annuities or health insurance should know that the insurance companies licensed in this state to write these types of insurance are members of the Wyoming Life and Health Insurance Guaranty Association. The purpose of this association is to assure that policyholders will be protected, within limits, in the unlikely event that a member insurer becomes financially unable to meet its obligations. If this should happen, the Guaranty Association will assess its other member insurance companies for the money to pay the claims of insured persons who live in this state and, in some cases, to keep coverage in force. The valuable extra protection provided by these insurers through the Guaranty Association is not unlimited, however. And, as noted in the box below, this protection is not a substitute for consumers' care in selecting companies that are well-managed and financially stable.

The Wyoming Life and Health Insurance Guaranty Association may not provide coverage for this policy. If coverage is provided, it may be subject to substantial limitations or exclusions, and require continued residency in Wyoming. You should not rely on coverage by the Wyoming Life and Health Insurance Guaranty Association in selecting an insurance company or in selecting an insurance policy.

Coverage is NOT provided for your policy or any portion of it that is not guaranteed by the insurer or for which you have assumed the risk, such as a variable contract sold by prospectus.

Insurance companies or their agents are required by law to give or send you this notice. However, insurance companies and their agents are prohibited by law from using the existence of the guaranty association for the purpose of sales or to induce you to purchase any kind of insurance policy.

The Wyoming Life and Health Insurance Guaranty Association P.O. Box 36009 Denver, CO 80236-0009 (888) 959-4091 (303) 292-5022 Fax: (303) 292-4663

State of Wyoming Department of Insurance 106 East 6th Avenue Cheyenne, Wyoming 82002-0400 (800) 438-5768 (in Wyoming) (307) 777-7401 Fax: (307) 777-2446

The state law that provides for this safety-net coverage is called the Wyoming Life and Health Insurance Guaranty Association Act. Below is a brief summary of this law's coverages, exclusions and limits. This summary does not cover all provisions of the law; nor does it in any way change anyone's rights or obligations under the act or the rights or obligations of the guaranty association.

COVERAGE

Generally, individuals will be protected by the Wyoming Life and Health Insurance Guaranty Association if they live in this state and hold a life or health insurance contract, or an annuity, or if they are insured under a group insurance contract, issued by a member insurer. The beneficiaries, payees or assignees of insured persons are protected as well, even if they live in another state.

EXCLUSIONS FROM COVERAGE

However, persons holding such policies are not protected by this Association if:

1. they are eligible for protection under the laws of another state (this may occur when the insolvent insurer was incorporated in another state whose guaranty association protects insureds who live outside that state);
2. the insurer was not authorized to do business in this state;
3. their policy was issued by a fraternal benefit society, a mandatory state pooling plan, a stipulated premium insurance company, a local mutual burial association, a mutual assessment company, or similar plan in which the policy-holder is subject to future assessments, or by an insurance exchange.

The Association also does not provide coverage for:

1. any policy or portion of a policy which is not guaranteed by the insurer or for which the individual has assumed the risk, such as a variable contract sold by prospectus;
2. any policy of reinsurance (unless an assumption certificate was issued);
3. interest rate yields that exceed an average rate;

• dividends; • credits given in connection with the administration of a policy by a group contract holder; • annuity contracts issued by a nonprofit insurance company exclusively for the benefit of nonprofit educational institutions and their employees; • unallocated annuity contracts (which give rights to group contract holders, not individuals); • any plan or program of an employer or association that provides life, health or annuity benefits to its employees or members to the extent the plan is self-funded or uninsured.

LIMITS ON AMOUNT OF COVERAGE

The act also limits the amount the Association is obligated to pay out: The Association cannot pay more than what the insurance company would owe under a policy or contract. Also, for any one insured life, the Association will pay a maximum of $300,000 - no matter how many policies and contracts there were with the same company, even if they provided different types of coverages. Within this overall $300,000 limit, the Association will not pay more than $100,000 in cash surrender values for life insurance policies, $300,000 for basic hospital, medical and surgical insurance or major medical insurance, $300,000 for disability insurance, disability income insurance and long-term care insurance, $100,000 for coverages not defined as disability insurance or disability income insurance or basic hospital medical and surgical insurance or major medical insurance or long term care insurance, including any net cash surrender and net cash withdrawal values, $250,000 in present value of annuity benefits including net cash surrender and net cash withdrawal values, or $300,000 in life insurance death benefits -- again, no matter how many policies and contracts there were with the same company, and no matter how many different types of coverages.