Maine Insurance Guaranty Association
What is the Maine Insurance Guaranty Association (MIGA)?
MIGA is part of a non-profit, unincorporated, state-based statutorily created system that pays certain covered claims of insolvent insurance companies' policyholders and claimants. Guaranty associations exist in every state. The state law requires that all licensed property and casualty insurance companies that write covered lines of insurance in the State of Maine be a member of MIGA.
A separate guaranty system exists for insurers that write life and health insurance and annuities. MIGA handles only property and casualty matters.
What is the role of the MIGA?
MIGA is designed to ease the burden on policyholders of and claimants against an insolvent insurer, by stepping in to assume responsibility for most policy claims following the insolvency. The coverage MIGA provides is fixed by policy language and state law; guaranty associations do not issue insurance policies. If your company is declared insolvent, it is incumbent on you to secure a replacement policy.
By virtue of the authority given to MIGA, it is able to provide payment of covered claims up to the limits set by the policy or by statute, whichever is less.
Where does MIGA get the money to pay the claims?
MIGA is funded by assessments of member insurers following an insolvency.
What kinds of insurance policies are protected by MIGA?
Most property and liability insurance policies written by insurers licensed in the State of Maine, such as auto, homeowner's, and workers' compensation are protected. MIGA does not cover title insurance, mortgage guaranty insurance, reinsurance, credit insurance, life insurance, annuity insurance, health insurance, disability insurance, warranty insurance, service contract insurance, insurance provided or guaranteed by a governmental entity, financial guaranty insurance and workers' compensation excess insurance issued to workers' compensation self-insurers.
Is there a limit to what MIGA will pay?
Generally, yes. Most claims pay up to the policy limits or $300,000, whichever is less. For workers' compensation claims, there is no limit. In addition, all other available insurance must be exhausted before MIGA will become obligated on any covered claim.
What about any premium I've already paid for the policy that is now cancelled before its original expiration period?
In most instances, MIGA will refund the amount of the policyholder's paid but unearned premium in excess of $50, up to a maximum of $25,000 per policy.
Before my company was declared insolvent, it was defending me in a lawsuit brought under my policy. What happens now?
If the company is already defending the case, in most insolvencies MIGA 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.