FAQs





What is Guaranty Fund Management Services ("GFMS")?

Guaranty Fund Management Services® is a voluntary, non-profit, unincorporated association committed to providing management and claims supervisory services to its member associations and fund; to assist them in the discharge of their respective statutory responsibilities to handle promptly and efficiently covered claims against insolvent property and casualty insurers; to furnish related or compatible services to property and casualty insurers and insurer organizations. 
The member associations are:

Connecticut Insurance Guaranty Association
District of Columbia Insurance Guaranty Association
Maine Insurance Guaranty Association
Massachusetts Insurers Insolvency Fund
New Hampshire Insurance Guaranty Association
Rhode Island Property & Casualty Insurance Guaranty Association
Vermont Property and Casualty Insurance Guaranty Association
Virginia Property and Casualty Insurance Guaranty Association



What do Guaranty Associations do?

Guaranty Associations are created in every state by statute for the purpose of protecting policyholders in the event of the insolvency of their insurance carrier. Property and casualty insurers in each of our eight states are required to be members of the state guaranty associations as a condition of being license to sell property and casualty insurance. Guaranty associations obtain funds for their operations and payment of claims through the assessments against the solvent insurance companies licensed to do business in the state, and from the recovery of amounts paid on claims from the insolvent insurer's estate. The money collected is used by the guaranty associations to pay covered claims.


Will the guaranty association cover all claims that would have been covered under my policy?

No. Each state insolvency statute excludes certain types of claims from being paid by the guaranty association, even if there was coverage under the original policy. In addition, the maximum amount of coverage is capped at a certain amount. Some states have a $300,000 cap, while others may have a $500,000 cap. In any event, the amount of coverage provided by a guaranty association will be the lesser of the policy limits or the maximum amount provided in the state guaranty association statute.


What happens if the amount of my claim is larger than the maximum amount paid by the guaranty association?

If the amount of your claim exceeds the maximum limits of the state guaranty association, you may file a claim for the unpaid portion with the Liquidator.


How long will it take to for the guaranty fund to pay my claim?

The amount of time it takes for a guaranty association to pay a claim can vary greatly, based on a number of factors, but claim payments usually begin as soon as possible following an Order of Liquidation.


Before my company went into liquidation, it was defending me in a lawsuit brought under my policy. What happens now?

If the company is already defending the case, the guaranty association will take control of the case and will continue to defend the suit or negotiate a settlement on your behalf, subject to the limitations in the insolvency statute about coverage.




IF THERE IS ANY INCONSISTENCY BETWEEN INFORMATION PROVIDED HEREIN AND ANY LAW OR REGULATION, THEN SUCH LAW OR REGULATION, OR ANY INTERPRETATION OF THE LAW OR REGULATION BY THE COURTS, WILL CONTROL.