Mississippi Life & Health Insurance Guaranty Association

Contact Information

Mississippi Life & Health Insurance Guaranty Association
PO Box 4562
Jackson, MS 39296
(p) 601.981.0755 (f) 601.362.9544
Association Web site: http://www.mslifega.org
State Insurance Department: http://www.doi.state.ms.us/

Law Summaries Report

[ Current as of January 01, 2020 ] ]

Coverages

Covered Contracts

§83-23-205(2)(a) This article shall provide coverage to the persons specified in subsection (1) of this section for direct, nongroup life, health, or annuity policies or contracts and supplemental contracts to any of these, for certificates under direct group policies and contracts, and for unallocated annuity contracts issued by member insurers, except as limited by this article. Annuity contracts and certificates under group annuity contracts include, but are not limited to, guaranteed investment contracts, deposit administration contracts, unallocated funding agreements, allocated funding agreements, structured settlement annuities, annuities issued to or in connection with government lotteries and any immediate or deferred annuity contracts. (Amended effective 3-17-2014)

Non-Covered Contracts

§83-23-205(2)(b) This article shall not provide coverage for: (i) A portion of a policy or contract not guaranteed by the insurer, or under which the risk is borne by the policy or contract owner; (ii) A policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract; (iii) A portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: 1. Averaged over the period of four (4) years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtracting two (2) percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four (4) years before the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier; and 2. On and after the date on which the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtracting three (3) percentage points from Moody's Corporate Bond Yield Average as most recently available; (iv) A portion of a policy or contract issued to a plan or program of an employer, association or other person to provide life, health or annuity benefits to its employees, members or others to the extent that the plan or program is self-funded or uninsured, including, but not limited to, benefits payable by an employer, association or other person under: 1. A Multiple Employer Welfare Arrangement as defined in 29 USCS Section 1002(40); 2. A minimum premium group insurance plan; 3. A stop-loss group insurance plan; or 4. An administrative services only contract; (v) A portion of a policy or contract to the extent that it provides for: 1. Dividends or experience rating credits; 2. Voting rights; or 3. Payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract; (vi) A policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue such policy or contract in this state; (vii) An unallocated annuity contract issued to or in connection with a benefit plan protected under the federal Pension Benefit Guaranty Corporation, regardless of whether the federal Pension Benefit Guaranty Corporation has yet become liable to make any payments with respect to the benefit plan; (viii) A portion of any unallocated annuity contract that is not issued to or in connection with a specific employee, union or association of natural persons benefit plan or a government lottery; (ix) A portion of a policy or contract to the extent that the assessments required by Section 83-23-217 with respect to the policy or contract are preempted by federal or state law; (x) An obligation that does not arise under the express written terms of the policy or contract issued by the insurer to the contract owner or policy owner, including without limitation: 1. Claims based on marketing materials; 2. Claims based on side letters, riders or other documents that were issued by the insurer without meeting applicable policy form filing or approval requirements; 3. Misrepresentations of or regarding policy benefits; 4. Extra-contractual claims; or 5. A claim for penalties or consequential or incidental damages; (xi) A contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer; (xii) A portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier. If a policy's or contract's interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture under this paragraph, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture; and (xiii) A policy or contract providing any hospital, medical, prescription drug or other health care benefits pursuant to Part C or Part D of Subchapter XVIII, Chapter 7 of Title 42 of the United States Code (commonly known as Medicare Part C & D or any regulations issued pursuant thereto. (Amended effective 3-17-2014).

Non-Resident Coverage

§83-23-205(1)(b)(ii). Yes. Covers nonresidents under the following conditions: 1)the insurer that issued the policies or contract is domiciled in this state; 2) the states in which the persons reside have associations similar to the association created by this article; and 3) the persons are not eligible for coverage an association in any other state due to the fact that the insurer was not licensed in the state at the time specified in the state's guaranty association law. (Amended effective 3-15-1999).

Benefit Limits

§83-23-205(3)(b)(i) With respect to any one (1) life, regardless of the number of policies or contracts: 1. Three Hundred Thousand Dollars ($ 300,000.00) in life insurance death benefits, but not more than One Hundred Thousand Dollars ($ 100,000.00) in net cash surrender and net cash withdrawal values for life insurance; 2. In health insurance benefits: a. One Hundred Thousand Dollars ($ 100,000.00) for coverages not defined as disability insurance or basic hospital, medical and surgical insurance or major medical insurance or long-term care insurance, including any net cash surrender and net cash withdrawal values; b. Three Hundred Thousand Dollars ($ 300,000.00) for disability insurance and Three Hundred Thou-sand Dollars ($ 300,000.00) for long-term care insurance; c. Five Hundred Thousand Dollars ($ 500,000.00) for basic hospital medical and surgical insurance or major medical insurance; or 3. Two Hundred Fifty Thousand Dollars ($ 250,000.00) in the present value of annuity benefits, including net cash surrender and net cash withdrawal values; (ii) With respect to each individual participating in a governmental retirement benefit plan established under Section 401, 403(b) or 457 of the United States Internal Revenue Code covered by an unallocated annuity contract or the beneficiaries of each such individual if deceased, in the aggregate, Two Hundred Fifty Thousand Dollars ($ 250,000.00) in present value annuity benefits, including net cash surrender and net cash withdrawal values; (iii) With respect to each payee of a structured settlement annuity (or beneficiary or beneficiaries of the payee if deceased), Two Hundred Fifty Thousand Dollars ($ 250,000.00) in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any; (iv) However, in no event shall the association be obligated to cover more than (a) an aggregate of Three Hundred Thousand Dollars ($ 300,000.00) in benefits with respect to any one (1) life under paragraphs (b) (i), (b) (ii) and (b) (iii) of this subsection except with respect to benefits for basic hospital, medical and surgical insurance and major medical insurance under paragraph (b) (i) of this subsection, in which case the aggregate liability of the association shall not exceed Five Hundred Thousand Dollars ($ 500,000.00) with respect to any one (1) individual, or (b) with respect to one (1) owner of multiple nongroup policies of life insurance, whether the policy owner is an individual, firm, corporation or other person, and whether the persons insured are officers, managers, employees or other persons, more than Five Million Dollars ($ 5,000,000.00) in benefits, regardless of the number of policies and contracts held by the owner; (v) With respect to either (a) one (1) contract owner provided coverage under subsection (1) (c) (ii) of this section; or (b) one (1) plan sponsor whose plans own directly or in trust one or more unallocated annuity contracts not included in paragraph (b) (ii) of this subsection, Five Million Dollars ($ 5,000,000.00) in benefits, irrespective of the number of contracts with respect to the contract owner or plan sponsor. However, in the case where one or more unallocated annuity contracts are covered contracts under this article and are owned by a trust or other entity for the benefit of two (2) or more plan sponsors, coverage shall be afforded by the association if the largest interest in the trust or entity owning the contract or contracts is held by a plan sponsor whose principal place of business is in this state and in no event shall the association be obligated to cover more than Five Million Dollars ($ 5,000,000.00) in benefits with respect to all these unallocated contracts; (Amended effective 3-17-2014).

Triggers

Discretionary Triggers

§83-23-215(1). When a member insurer is impaired. (Amended effective 3-15-99).

Mandatory Triggers

§83-23-215(2). When a member insurer is insolvent.

Foreign Triggers

No separate provision.

"Impaired Insurer"

§83-23-209(j). A member insurer which, after the effective date of this article, is not an insolvent insurer, and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction. (Amended effective 3-15-99)

"Insolvent Insurer"

§83-23-209(k). A member insurer which after the effective date of this article, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency. (Amended effective 3-15-99)

"Member Insurer"

§83-23-209(l). An insurer licensed or that holds a certificate of authority to transact in Mississippi any kind of insurance for which coverage is provided under Section 83-23-205, and includes any insurer whose license or certificate of authority in this state may have been suspended, revoked, not renewed or voluntarily withdrawn, but does not include: (i) A hospital or medical service organization whether profit or nonprofit; (ii) A health maintenance organization; (iii) A fraternal benefit society; (iv) A mandatory state pooling plan; (v) A mutual assessment company or other person that operates on an assessment basis; (vi) An insurance exchange; or (vii) Any entity similar to any of the above.

Account Structure

§83-23-211(1). Two accounts: For purposes of administration and assessment the association shall maintain two (2) accounts: (a) The life insurance and annuity account which includes the following subaccounts: (i) Life insurance account; (ii) Annuity account which shall include annuity contracts owned by a governmental retirement plan (or its trustee) established under Section 401, 403(b) or 457 of the United States Internal Revenue Code, but shall otherwise exclude unallocated annuities; and (iii) Unallocated annuity account which shall exclude contracts owned by a governmental retirement benefit plan (or its trustee) established under Section 401, 403(b) or 457 of the United States Internal Revenue Code. (b) The health insurance account. (Amended effective 3-15-99)

Assessments

Assessment Limits

§83-23-217(5)(a). Two percent (2%) of average annual premiums in state for policies covered by each account or subaccountduring the three calendar years preceding the year in which the insurer became impaired or insolvent. (Amended effective 3-15-99).

Assessment Classes

§83-23-217(1). Two classes of assessments: Class A for administrative and legal costs, other expenses; and Class B to carry out the powers and duties of the association with regard to an impaired or insolvent insurer. (Amended effective 3-15-99)

Interest Rate Adjustments

§83-23-205(2)(b)(iii). Guaranty Association excludes from coverage: A portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: 1. Averaged over the period of four (4) years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtract-ing two (2) percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four (4) years before the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier; and 2. On and after the date on which the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier, exceeds the rate of interest determined by subtracting three (3) percentage points from Moody's Corporate Bond Yield Average as most recently available; (Amended effective 3/17/2014)

Tax Offsets

§83-23-218(1). Yes. Prior to July 1, 1993, up to 25% of amount of assessment may be offset for the next two succeeding years; covers all but administrative expenses. After July 1, 1993, up to 20% of amount of assessments over the succeeding 5 years may be offset. Carryover is allowed where the offset is less than 20%, until offset is fully used.

Definition of Premium

§ 83-23-209 (q) “(q) "Premiums" means amounts or considerations (by whatever name called) received on covered policies or contracts less returned premiums, considerations and deposits, and less dividends and experience credits. "Premiums" does not include amounts or considerations received for policies or contracts or for the portions of policies or contracts for which coverage is not provided under Section 83-23-205(2), except that assessable premium shall not be reduced on account of Sections 83-23-205(2)(b)(iii) relating to interest limitations and 83-23-205(3) (b) relating to limitations with respect to one (1) individual, one (1) participant and one (1) contract owner. "Premiums" shall not include: (i) Premiums in excess of Five Million Dollars ($ 5,000,000.00) on an unallocated annuity contract not issued under a governmental retirement benefit plan (or its trustee) established under Section 401, 403(b) or 457 of the United States Internal Revenue Code; or (ii) With respect to multiple nongroup policies of life insurance owned by one (1) owner, whether the policy owner is an individual, firm, corporation or other person, and whether the persons insured are officers, managers, em-ployees or other persons, premiums in excess of Five Million Dollars ($ 5,000,000.00) with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner. (Amended effective 3/17/2014)

Advertising Prohibition

§83-23-235 “Use of association's name to advertise; statement of purpose and limitations of article; attachment to contracts; disclaimer” (1) No person, including an insurer, agent or affiliate of an insurer shall make, publish, disseminate, circulate or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement, written or oral, which uses the existence of the Insurance Guaranty Association of this state for the purpose of sales, solicitation or inducement to purchase any form of insurance covered by the Mississippi Life and Health Insurance Guaranty Association Act. However, this § shall not apply to the Mississippi Life and Health Insurance Guaranty Association or any other entity which does not sell or solicit insurance.

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