State RegulationsMI specificDifficulty 1/5
Which of the following is NOT protected by the Michigan Life and Health Insurance Guaranty Association if the issuing entity fails?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The Michigan Life and Health Insurance Guaranty Association, created under M.C.L. 500.7702 of the Michigan Insurance Code, protects Michigan policyholders of member insurers, which are licensed life and health insurers. Certificates issued by fraternal benefit societies fall outside that protection, as do HMO coverage, the nonprofit health care corporation, and portions of single-premium immediate annuities that are not guaranteed. Consumers holding fraternal certificates therefore have no guaranty association backstop if the society fails.
Why the other options are wrong
- A) Individual life policies from licensed Michigan life insurers are core MLHIGA-protected business.
- C) Individual annuities with guaranteed values are protected up to the annuity cap under M.C.L. 500.7704.
- D) Individual disability income policies are protected up to $300,000 under M.C.L. 500.7704.
Memory hook
Fraternal certificates sit outside the guaranty blanket.