To fund the Life and Health Guaranty Corporation, how does the Board of Directors raise necessary funds?

The choice of assessing member insurers provides the correct mechanism by which the Board of Directors raises necessary funds for the Life and Health Guaranty Corporation. This is established under Maryland law, which enables the corporation to ensure that funds are available to cover claims owed to policyholders in the event that an insurer becomes insolvent.

By assessing member insurers, the corporation effectively distributes the financial responsibility among the recognized insurance providers, helping to stabilize the insurance market and safeguard consumers. This assessment is typically based on the amount of premiums written by each insurer and is structured to ensure that the corporation has sufficient resources to fulfill its obligations to insure the continuity of certain life and health insurance policies.

The other options do not reflect the operational funding models established for the corporation. Collecting premiums from all policyholders would not be feasible or appropriate, as the Guaranty Corporation does not directly underwrite insurance. Government funding and contributions from beneficiaries are also not accepted methods for raising funds in this context, as the structure relies on insurance providers to support the safety net established for policyholders through their assessments.