Ohio Life & Health Insurance Guaranty Association

Contact Information

Ohio Life & Health Insurance Guaranty Association
5005 Horizons Drive, Suite 200
Columbus, OH 43220
(p) 614.442.6601 (f) 614.442.0004
Association Web site: http://www.olhiga.org
State Insurance Department: http://www.ohioinsurance.gov/

Law Summaries Report

[ Current as of January 01, 2020 ] ]

Coverages

Covered Contracts

§3956.04.(B)(1). This chapter provides coverage to the persons specified in division (A) of this section for direct, nongroup life, health, or annuity policies or contracts, for certificates under direct group policies and contracts, for supplemental contracts to any of the preceding, and for unallocated annuity contracts, in each case issued by member insurers, except as otherwise limited in this chapter. 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 12.22.2015)

Non-Covered Contracts

§3956.04.(B)(2). This chapter does not provide coverage for any of the following: (a) Any portion of a policy or contract not guaranteed by the insurer, or under which the risk is borne by the policy or contract holder; (b) Any policy or contract of reinsurance, unless assumption certificates have been issued; (c) Any portion of a policy or contract to the extent that the rate of interest on which it is based: (i) Averaged over the period of four years prior to the date on which the association becomes obligated with respect to the policy or contract or if the policy or contract has been issued for a lesser period averaged over that period, exceeds the rate of interest determined by subtracting two percentage points from the monthly average-corporates as published by Moody’s investors service, inc., or any successor to that service, averaged for the same period; (ii) On and after the date on which the association becomes obligated with respect to the policy or contract, exceeds the rate of interest determined by subtracting three percentage points from the monthly average-corporates as published by Moody’s investors service, inc., or any successor to that service, as most recently available. If the monthly average-corporates is no longer published, the superintendent, by rule, shall establish a substantially similar average. (d) Any plan or program of an employer, association, or similar entity to provide life, health, or annuity benefits to its employees or members 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 similar entity under any of the following: (i) A multiple employer welfare arrangement as defined in section 3(40) of the “Employee Retirement Income Security Act of 1974,” 88 Stat. 833, 29 U.S.C.A. 1002(40), as amended; (ii) A minimum premium group insurance plan; (iii) A stop-loss group insurance plan; (iv) An administrative services only contract. (e) Any portion of a policy or contract to the extent that it provides dividends or experience rating credits, or provides that any fees or allowances be paid to any person, including the policy or contract holder, in connection with the service to or administration of the policy or contract; (f) Any 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 the policy or contract in this state; (g) Any unallocated annuity contract issued to an employee benefit plan protected under the federal pension benefit guaranty corporation; (h) Any portion of any unallocated annuity contract that is not issued to or in connection with a governmental lottery or a benefit plan of a specific employee, union, or association of natural persons; (i) Any policy or contract issued to or for the benefit of a past or present director or officer within one year of the filing of the successful complaint that the insurer was impaired or insolvent; (j) Any policy or contract issued by any entity described in division (F)(2) of section 3956.01 of the Revised Code; (k) Any policy or contract issued by a member insurer if the member insurer is carrying on as a line of business, and not as a separate legal entity, the activities of any entity described in division (F)(2) of section 3956.01 of the Revised Code, and the policy or contract is issued as a product of those activities; (l) Any policy or contract providing hospital, medical, prescription drug, or other health care benefits pursuant to 42 U.S.C. Chapter 7, Title XVIII, Parts C and D and any corresponding regulations. (Amended effective 12.22.2015)

Non-Resident Coverage

§3956.04.(A)(2)(b). Yes. Covers nonresidents if all of the following conditions apply: (i) The insurers that issued the policies or contracts are domiciled in this state; (ii) At the time the policies or contracts were issued, the insurers did not hold a license or certificate of authority in the states in which the persons reside; (iii) The states have associations similar to the association created by section 3956.06 of the Revised Code; (iv) The persons are not eligible for coverage by those associations. (Amended effective 12.22.2015)

Benefit Limits

§3956.04(C) The benefits for which the association may become liable shall not exceed the lesser of either of the following: (1) The contractual obligations for which the insurer is liable or would have been liable if it were not an impaired or insolvent insurer; (2) (a) With respect to any one life, regardless of the number of policies or contracts: (i) Three hundred thousand dollars in life insurance death benefits, but not more than one hundred thousand dollars in net cash surrender and net cash withdrawal values for life insurance; (ii) One hundred thousand dollars in health insurance benefits other than basic hospital, medical, and surgical insurance, major medical insurance, disability insurance, or long-term care insurance, including any net cash surrender and net cash withdrawal values; (iii) Three hundred thousand dollars in disability insurance; (iv) Three hundred thousand dollars in long-term care insurance; (v) Five hundred thousand dollars in basic hospital, medical, and surgical insurance or major medical insurance; (vi) Two hundred fifty thousand dollars in the present value of annuity benefits, including net cash surrender and net cash withdrawal values. (b) With respect to each individual participating in a governmental retirement plan established under section 401, 403(b), or 457 of the “Internal Revenue Code of 1986,” 100 Stat. 2085, 26 U.S.C.A. 1, as amended, and covered by an unallocated annuity contract, or the beneficiaries of each such individual if deceased, in the aggregate, two hundred fifty thousand dollars in present value annuity benefits, including net cash surrender and net cash withdrawal values. The association is not liable to expend more than three hundred thousand dollars in the aggregate with respect to any one individual under divisions (C)(2)(a), (b), and (d) of this section combined, except with respect to benefits for basic hospital, medical, and surgical insurance and major medical insurance under division (C)(2)(a)(v) of this section, in which case the aggregate liability of the association shall not exceed five hundred thousand dollars with respect to any one individual. (c) With respect to any one contract holder, covered by any unallocated annuity contract not included in division (C)(2)(b) of this section, one million dollars in benefits, irrespective of the number of those contracts held by that contract holder. (d) With respect to each payee of a structured settlement annuity, or the beneficiary or beneficiaries of the payee if the payee is deceased, two hundred fifty thousand dollars in present value of annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any. (Amended effective 12.22.2015)

Triggers

Discretionary Triggers

§3956.08(A). When a domestic insurer is impaired.

Mandatory Triggers

§3956.08(C). When a member insurer is insolvent.

Foreign Triggers

§3956.08(B). When a foreign or alien insurer is impaired and not paying claims timely.

"Impaired Insurer"

§3956.01(D). “Impaired insurer” means a member insurer that, after November 20, 1989, is not an insolvent insurer and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction. (Amended effective 12.22.2015)

"Insolvent Insurer"

§3956.01(E). “Insolvent insurer” means a member insurer that, after November 20, 1989, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.

"Member Insurer"

§3956.01(F)(1) Any insurer that holds a certificate of authority or is licensed to transact in Ohio any kind of insurance for which coverage is provided under section 3956.04 of the Revised Code, and includes any insurer whose certificate of authority or license in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn after November 20, 1989. (2) "Member insurer" does not include any of the following: (a) A health insuring corporation; (b) A fraternal benefit society; (c) A self-insurance or joint self-insurance pool or plan of the state or any political subdivision of the state; (d) A mutual protective association; (e) An insurance exchange; (f) Any person who qualifies as a "member insurer" under section 3955.01 of the Revised Code and who does not receive premiums on covered policies or contracts; (g) Any entity similar to any of those described in divisions (F)(2)(a) to (f) of this section. (3) "Member insurer" includes any insurer that operates any of the entities described in division (F)(2) of this section as a line of business, and not as a separate, affiliated legal entity, and otherwise qualifies as a member insurer.

Account Structure

§3956.06(A). Two accounts: (1)life insurance and annuity which includes sub accounts: (a)life insurance (b)annuity (c)unallocated annuity (includes I.R.C. § 403(b) annuities); and (2) health insurance.

Assessments

Assessment Limits

§3956.09(E)(1). Two percent (2%) of the average premiums in state for policies covered by the account during the three calendar years preceeding the impairment or insolvency.

Assessment Classes

§3956.09(B). Two classes of assessments: Class A for administrative and legal costs, other expenses and examinations; and Class B to carry out the powers and duties of the association with regard to an impaired or insolvent insurer.

Interest Rate Adjustments

§3956.04(B)(2)(c) Guaranty Association excludes from coverage: Any portion of a policy or contract to the extent that the rate of interest on which it is based: (i) Averaged over the period of four years prior to the date on which the association becomes obligated with respect to the policy or contract or if the policy or contract has been issued for a lesser period averaged over that period, exceeds the rate of interest determined by subtracting two percentage points from the monthly average-corporates as published by Moody's investors service, inc., or any successor to that service, averaged for the same period; (ii) On and after the date on which the association becomes obligated with respect to the policy or contract, exceeds the rate of interest determined by subtracting three percentage points from the monthly average-corporates as published by Moody's investors service, inc., or any successor to that service, as most recently available. If the monthly average-corporates is no longer published, the superintendent, by rule, shall establish a substantially similar average.

Tax Offsets

§3956.20. Yes. Up to 20% per year of amount paid during the fiscal biennium may be offset, beginning the calendar year following the end of the fiscal biennium; covers all but administrative expenses.

Definition of Premium

§ 3956.01 (G) “Premiums” means amounts received on covered policies or contracts, less premiums, considerations, and deposits returned on the policies or contracts, and less dividends and experience credits on the policies and contracts. “Premiums” does not include either of the following: (1) Any amounts in excess of one million dollars received on any unallocated annuity contract not issued under a governmental retirement plan established under Section 401, 403(b), or 457 of the “Internal Revenue Code of 1986,” 100 Stat. 2085, 26 U.S.C.A. 1, as amended; (2) Any amounts received for any policies or contracts or for the portions of any policies or contracts for which coverage is not provided under section 3956.04 of the Revised Code. Division (G)(2) of this section shall not be construed to require the exclusion, from assessable premiums, of premiums paid for coverages in excess of the interest limitations specified in division (B)(2)(c) of section 3956.04 of the Revised Code or of premiums paid for coverages in excess of the limitations with respect to any one individual, any one participant, or any one contract holder specified in division (C)(2) of section 3956.04 of the Revised Code.

Advertising Prohibition

§3956.18 “Use of existence of association to sell insurance prohibited...” (A)(1) No person shall make, publish, disseminate, circulate, or place before the public, or cause 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 or television station, or in any other manner, any advertisement, announcement, or statement, written or oral, that uses the existence of the Ohio life and health insurance guaranty association for the purposes of sales, solicitation, or inducement to purchase any form of insurance covered by this chapter. (2) As used in division (A)(1) of this §, "person" includes but is not limited to any insurer or any agent or affiliate of any insurer. (3) Division (A)(1) of this § does not apply to the association or any other entity that does not sell or solicit insurance.

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National Organization of Life & Health Insurance Guaranty Associations
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Phone Number: 703.481.5206