Massachusetts Insurers Insolvency Fund
What is the Massachusetts Insurers Insolvency Fund (MIIF)?
MIIF 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 Commonwealth of Massachusetts be a member of MIIF.
A separate guaranty system exists for insurers that write life and health insurance and annuities. MIIF handles only certain property and casualty matters.
What is the role of MIIF?
MIIF 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 MIIF 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 MIIF, 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 MIIF get the money to pay the claims?
MIIF is funded by assessments of member insurers following an insolvency.
What kinds of insurance policies are protected by MIIF?
Most property and liability insurance policies written by insurers licensed in the Commonwealth of Massachusetts, such as auto, homeowner's and workers' compensation are protected. MIIF does not cover life, accident and health, surety, disability credit, mortgage guaranty, financial guaranty or other forms of insurance offering protection against investment risks, insurance of warranties of any type of service contracts, and ocean marine insurance.
Is there a limit to what MIIF will pay?
Generally, yes. Most claims pay up to the policy limits or $300,000, whichever is less. For worker's compensation claims, there is no limit. In addition, all other available insurance must be exhausted before MIIF 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 cases, MIIF will refund the amount of the policyholder's paid but unearned premium, up to $300,000 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 MIIF 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.