Pre-funded Guaranty Fund

  • NP - NYT-? - Mutual Benefit - Industry thinking about prefunded Fund.
  • 1995-1, NAIC Proceedings 
    • Commissioner Robert Wilcox (Utah) agreed and suggested that there be a charge to the appropriate committee for the NAIC to study and consider a pre-funded guaranty fund and whether an interstate compact would be an appropriate mechanism to implement such a fund.
      • He added that the compact was thought to be a means to protect a pre-funded guaranty fund from state legislatures as well as an efficient and effective method to administer the fund.
      • The compact would establish a body to hold the funds as a trustee, and the only way the funds could be reached would be a dissolution of the compact itself, which could only be accomplished by legislative action.

(p118) - Mrs. Olga Pegelow - Chicago - Executive Life Annuity Policyholder

  • Mrs. PEGELOW .  May I ask a question? -- I know there is a guaranty fund in 48 States, but in that guaranty fund, is the money there?
  • Alex MCMILLAN (R-NC).  Well, that is another question.  -- In most cases, since it is a guarantee.
  • Mrs. PEGELOW.  But the money is not there. -- The money has to first be collected.
  • Mr. McMILLAN. But that means that those who participate in that State in the sale of insurance are obligated to pay into the fund.
  • Mrs. PEGELOW. In other words, all the other insurance companies that are solvent in that State will have to donate the money or pay the money to this guaranty fund;
    • .... it isn't like the FDIC where the money is there.
  • Mr. McMILLAN. I wish it were.
  • Mrs. PEGELOW. Right. So there is that difference. There is a guaranty fund, but there is no life ---
  • Mr. McMILLAN. Those are based on guarantees too. The fact of the matter is ---
  • Mrs. PEGELOW. But the Government is behind the FDIC.
  • Mr. McMILLAN. The reason why the taxpayers are having to pay off S&L depositors is because the fund wasn't adequate to meet the guarantee of the deposits.
  • Mrs. PEGELOW. Correct. And this is the same problem with the insurance money.
    • The money isn't there.
  • Mr. McMILLAN . You obviously make a very valid point.

1991 0227, 0507, 0509, 0523 - GOV (Senate) - Insurance Company Solvency, (CSPAN) Insurance Company Insolvencies - [PDF-369p-GooglePlay, 0509-VIDEO-CSPAN]  <VIDEO-?-0227/0507 and 0523 - Committee on Commerce, Science, and Transportation