State RegulationsNC specificDifficulty 1/5
A North Carolina-domiciled insurer becomes financially impaired. A policyholder holds an individual health insurance policy that qualifies as a health benefit plan. Under G.S. 58-62-21(d)(2a), the limit on the guaranty association's coverage for this policy is:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-62-21(d)(2a), health insurance benefits are capped at $500,000 for coverages defined as health benefit plans and $300,000 for coverages not so defined. The association's protection applies per life regardless of the number of policies, so a qualifying health benefit plan is protected up to $500,000 under the North Carolina Life and Health Insurance Guaranty Association framework.
Why the other options are wrong
- A) $300,000 applies to coverages not defined as health benefit plans, and it is also the aggregate life limit including cash values under G.S. 58-62-21(d)(2),(6).
- C) North Carolina has no separate $100,000 cash-value sublimit; cash values fold into the $300,000 aggregate limit under G.S. 58-62-21(d)(2),(6).
- D) $1,000,000 is the structured settlement limit per payee under G.S. 58-62-21(d)(5).
Memory hook
Health benefit plans get half a million; other health coverage gets $300k.