What is the purpose of the Life and Health Guaranty Corporation?

The Life and Health Guaranty Corporation is established to protect consumers by ensuring that policyholders receive their life and health insurance benefits even if the insurance company becomes insolvent. This system is crucial for maintaining public confidence in the insurance industry, as it provides a safety net for individuals who might otherwise face significant financial losses due to an insurer's inability to pay claims.

When a licensed insurer fails, the Guaranty Corporation steps in to honor the obligations that the insurer has to its policyholders, up to specified limits. This includes payment of benefits from life and health insurance policies, ensuring that individuals can receive the necessary coverage and benefits that they are entitled to, despite the failure of their insurance provider.

Other options presented do not align with the principal function of the Guaranty Corporation. Providing insurance against job loss does not pertain to the Corporation’s focus on life and health benefits. Similarly, regulating insurance premiums and overseeing insurance claims fall under different regulatory bodies and functions within the insurance industry, not under the purview of the Guaranty Corporation.