North Carolina Insurance Guaranty Association

Per North Carolina general statutes of chapter 58, article 36, one of the North Carolina Insurance Guaranty association's responsibilities is to provide a "mechanism for the payment of covered claims under certain Insurance policies". Funds for the payment of covered claims are received from the following sources:1) the North Carolina department of Insurance notifies the Guaranty association when a court of competent jurisdiction declares an Insurance company insolvent. After the notification, the Guaranty management staff makes a formal request for the insolvent Insurance company's security deposit (all licensed Insurance companies in North Carolina are required to make a security deposit payment to the department of Insurance). This security deposit will be used to pay the insolvent company's unpaid claims and unearned premiums.2) the Guaranty association may also receive proceeds from the insolvent company's liquidator. The Guaranty association does not have advance notice of when liquidator funds will be remitted. The liquidator proceeds are also used to make unpaid claim and unearned premium payments. The liquidators also transfer claim data to the Guaranty association.the Guaranty association's claims staff is responsible for reviewing claim detail and ensuring it meets requirements to be processed. Once the claims adjusters determine the requirements have been met, the claims adjusters will activate the claim file and begin to process claim unpaid claims and unearned premiums payments. As of the end of calendar year 2022, there were 42 insolvencies with a total of 332 open claims. 7,603 claims have been closed. Total claims expense and premium refund expenses totaled $7,150,672 and $8,557,667, respectively.

Assess member companies for amounts necessary to pay expenses of handling covered claims; refund member companies excess amounts previously assessed.per North Carolina general statutes of chapter 58, article 36, one of the North Carolina Insurance Guaranty association's responsibilities is to provide a "an association to assess the loss of (insurer insolvencies) among insurers". To accomplish this, the governing board will review operating expenses and covered claims costs to determine if a new assessment is necessary to cover expenses, or if a refund of a prior assessment is permissible. Any assessments are borne by the Guaranty association's member Insurance companies in proportion to net direct written premiums.during calendar year 2022, the Guaranty association's board of directors assessed member insurers $19,000,000 and approved refunds of $9,000,000.