Self-insured groups are usually covered by state guaranty funds.

Self-insured groups are usually covered by state guaranty funds.

• A. False
• B. True
• C. Not applicable
• D. Sometimes

Answer: (A)

State guaranty funds protect claimants when an insurance company that has issued policies becomes insolvent. They are there to ensure covered benefits are paid by the insurer, not by the employer itself. Self-insured groups fund and administer workers’ compensation benefits without purchasing a policy from an admitted insurer, operating under state-approved self-insurance programs. Because there isn’t an insolvent insurer to trigger the guaranty fund, self-insured groups are not usually covered by these funds. If a group uses an insurer for part of its coverage, that insurer’s insolvency would be handled by the guaranty fund, but the self-insured group itself isn’t the guaranty fund’s typical responsibility.

State guaranty funds protect claimants when an insurance company that has issued policies becomes insolvent. They are there to ensure covered benefits are paid by the insurer, not by the employer itself. Self-insured groups fund and administer workers’ compensation benefits without purchasing a policy from an admitted insurer, operating under state-approved self-insurance programs. Because there isn’t an insolvent insurer to trigger the guaranty fund, self-insured groups are not usually covered by these funds. If a group uses an insurer for part of its coverage, that insurer’s insolvency would be handled by the guaranty fund, but the self-insured group itself isn’t the guaranty fund’s typical responsibility.