State RegulationsMI specificDifficulty 1/5
Which of the following would be covered by the Michigan Life and Health Insurance Guaranty Association if the issuing insurer became insolvent?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.7702 establishes the Michigan Life and Health Insurance Guaranty Association to back the policy obligations of member insurers licensed to write life, accident and health business in Michigan. An individual life policy issued by a licensed stock life insurer is squarely within that protection under M.C.L. 500.7704. By contrast, Michigan law expressly excludes certain carrier types from guaranty protection, which is why applicants should understand that coverage from those alternative carriers carries a different insolvency framework.
Why the other options are wrong
- B) Fraternal benefit society certificates are expressly excluded from guaranty-association coverage.
- C) Health maintenance organization (HMO) plans are excluded from guaranty-association coverage.
- D) Certificates from nonprofit health care corporations such as Blue Cross Blue Shield of Michigan are excluded from guaranty-association coverage.
Memory hook
Fraternal, HMO, and Blue-type plans sit outside the guaranty umbrella.