West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-36 - West Virginia Life And Health Guaranty Association Act Notice Requirments › Appendix A

Current through Register Vol. XLI, No. 28, July 12, 2024
SUMMARY OF THE WEST VIRGINIA LIFE AND HEALTH INSURANCE
						  GUARANTY ASSOCIATION ACT AND NOTICE CONCERNING COVERAGE
LIMITATIONS AND
						  EXCLUSIONS
(Effective July 10, 2009)
Residents of West Virginia 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 West Virginia Life and Health
				  Insurance Guaranty Association. The purpose of this association is to assure that
				  policy holders 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 West Virginia 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 West Virginia. You should not rely on coverage by the West Virginia
						  Life and Health Insurance Guaranty Association in selecting an insurance company or
						  in selecting an insurance policy. For a complete description of coverage, consult
						  Article 26A, Chapter 33 of the West Virginia Code.
Coverage is NOT provided
						  for any portion OF YOUR CONTRACT that is not guaranteed by the insurer or for which
						  you have assumed the risk.
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 to
						  induce you to purchase any kind of insurance policy. The Guaranty Association or the
						  West Virginia Insurance Commission will respond to questions you may have which are
						  not answered by this document. Policyholders with additional questions may contact:
						  West Virginia Life and Health Insurance Guaranty Association P.O. Box 816
						  Huntington, West Virginia 25712 West Virginia Insurance Commissioner Consumer
						  Services Division 1124 Smith Street, Rm 309 P.O. Box 50540 Charleston, West Virginia
						  25305-0540 (304) 558-3386 Toll Free 1-888-879-9842 TDD 1-800-435-7381
The state law that provides for this safety-net coverage is called
				  the West Virginia Life and Health Insurance Guaranty Association Act. On the back of
				  this page 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 West Virginia Life
				  and Health Insurance Guaranty Association if they live in West Virginia and hold a
				  life or health insurance contract, annuity contract, unallocated annuity contract,
				  or if they are insured under a group life, health or annuity insurance contract,
				  issued by a member insurer. Member insurer also includes non-profit service
				  corporations (W. Va. Code §33-24) and health care corporations (W. Va. Code
				  §33-25). 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:
$ 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);
$ The insurer was not authorized to do business in this
				  state;
$ The policy was issued at a time when the insurer was not
				  licensed or authorized to do business in the state;
$ Their policy was issued by an HMO, a fraternal benefit society,
				  mandatory state pooling plan, a mutual protective association or similar plan in
				  which the policy holder is subject to future assessments, an insurance exchange, or
				  any entity similar to the above.
The association also does not provide coverage for:
$ Any policy or portion of a policy which is not guaranteed by the
				  insurer or for which the individual or contract holder has assumed the risk;
$ Any policy of reinsurance (unless an assumption certificate was
				  issued);
$ Interest rate yields that exceed an average rate;
$ Dividends;
$ Credits given in connection with the administration of a policy
				  by a group contractholder;
$ Employer or association plans to the extent they are self-funded
				  (hat is, not insured by an insurance company, even if an insurance company
				  administers them) or uninsured, including:
i. multiple employer welfare arrangement;
ii. minimum premium group insurance plan;
iii. stop loss group insurance plan; or
iv. administrative services only contract.
$ Any unallocated annuity contract issued to an employee benefit
				  plan protected under the federal pension guaranty corporation;
$ Any portion of any unallocated contract which is not issued to
				  or in connection with a specific employee, union or association's benefit plan or a
				  governmental lottery.
$ Any policy or contract providing any hospital, medical,
				  prescription drug or other health care benefits pursuant to Medicare Part C and
				  D;
$ An obligation that does not arise under the written terms of the
				  policy, including claims based on marketing materials; claims based on side letters
				  or riders not approved by the Commissioner; misrepresentations regarding policy
				  benefits; extracontractual claims or claims for penalties or consequential or
				  incidental damages
$ A contractual agreement that establishes the member insurer's
				  obligation to provide a book value guaranty for defined contribution benefit plan
				  participants by reference to a portfolio of assets that is owned by the benefit plan
				  or trustee, which is not an affiliate of the insurer
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, regardless of the number of
				  policies or contracts, the association will only pay:
$ $300,000 in life insurance benefits, but no more than $100,000
				  in net cash surrender and net cash withdrawal values;
$ $300,000 for disability insurance;
$ $300,000 for long term care insurance;
$ $250,000 in the present value annuity benefits, including net
				  cash surrender and net cash withdrawal values;
$ $500,000 for basic major hospital medical and surgical insurance
				  or major medical insurance, and;
$ $100,000 for all other types of accident and sickness insurance
				  than those listed above (disability, long term care, and major medical).
Also for any one insured life, the association will only pay a
				  maximum of $300,000 - no matter how many policies and contracts there were with the
				  same company for all policies or contracts other than major medical insurance, in
				  which case the aggregate limit shall not exceed $500,000 with respect to any one
				  individual.
Note to benefit plan trustees or other holders of unallocated
				  annuities (GICs, DACs, etc.) covered by the act: for unallocated annuities that fund
				  governmental retirement plans under §§ 401(k), 403 (b) or 457 of the
				  Internal Revenue Code, the limit is $250,000 in present value of annuity benefits
				  including net cash surrender and net cash withdrawal per participating individual.
				  In no event shall the association be liable to spend more than $300,000 in the
				  aggregate per individual; for covered unallocated annuities that fund other plans, a
				  special limit of $5,000,000 applies to each contract holder, regardless of the
				  number of contracts held with the same company or number of persons covered. In all
				  cases, of course, the contract limits also apply.