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How are these assessments computed?

Assessments are computed and billed based on the immediate needs of the guaranty association that has claims it needs to pay. Claim files come in to the guaranty fund from the insolvent insurance company; our adjusters review them, and set appropriate reserves on those files. (Reserves are the projected ultimate liability under terms of a given policy.)

In Indiana the assessment cap is one percent of net direct-written premium. Guaranty funds cannot assess an insurance company over the statutorily set cap on assessments. An additional source of funding also include recoveries from the receivers of insolvent insurance companies, paid as the courts allow.



faq | by Dr. Radut