Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Problem with a bad bank? Had a brokerage account that went under? Your life insurance company goes bankrupt? There are mechanisms in place to keep you covered. Despite the federal takeover of AIG in September , most people are surprised by the fact that the role of consumer protection against insurance company failures actually falls into the hands of state governments.
State insurance regulators are responsible for monitoring the financial health of the insurance companies that are licensed to do business in their respective states. Failures and bankruptcies are uncommon. But if a failure or bankruptcy does occur, then safeguards are in place to protect consumers. These include:. Life insurance companies are required by state law to maintain capital reserves to pay out policyholder death benefits in the event that the business fails.
Reinsurance is another strategy that allows insurance companies to mitigate the risk of potential losses if a business failure occurs. Essentially, life insurance companies purchase insurance policies from other insurers, which allows them to spread out risk. So if one company goes under, for example, then the other companies can take up the reins to ensure that any claims or death benefits are paid.
Am I covered? If so, how do I make a claim? What happens I have a claim in progress? Here's what to expect: Once an insurance firm becomes insolvent, policyholders usually find out from the insolvency practitioner IP who is appointed to sort out their financial affairs.
Regarding the policies that customers hold with the failed insurer, there are two potential outcomes: The policies will be replaced by a new insurer, so customers have uninterrupted cover. Customers may receive a refund based on the cost of the insurance premium portion of their policy. This is because: The overall cost of the insurance at the time of buying includes other fees, such as administration costs, and FSCS can only protect the insurance premium portion of the policy. The policy premium refund reflects how much time was left on the policy.
What happens if you have a new claim Follow the instructions set out in your policy documentation, unless you have received instructions telling you otherwise from your insurer, broker, or the IP.
You can also usually find this information here on our site. Simply search the name of the failed insurer in the box at the top of any page to be directed to a dedicated page for the firm. You can also provide your contact details on this page to register for updates as the insolvency process progresses. Modal title Click to search. Search results Page or category Title. Select Region.
United States. United Kingdom. Cameron Huddleston. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations. Get A Quote. Was this article helpful? Share your feedback. Send feedback to the editorial team. Rate this Article. Thank You for your feedback! Something went wrong.
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