The vendor through whom we offer life and health insurance has sent us documentation regarding a new IN requirement to send a "Guaranty Association Notice" that supposedly must be given to all who purchase a life and health insurance policy. Has anyone heard of this? I would like to read the new regulation before speaking with our vendor, and a quick IC search didn't turn up anything.

Do you know what this "Guaranty Association Notice" is?

I have asked the vendor to provide more information. In the meantime though, here is what the letter said:

"The state of Indiana is now requiring a Guaranty Association Notice be given to all insureds that have purchased a life and health insurance policy. We are enclosing an initial supply of this notice for you to begin using immediately. This notice will need to be given to your customers along with the AUL insurance certificate, on a go-forward basis."

The notice that they enclosed says:
"The Indiana Life and Health Guaranty Association provides coverage of claims under some types of policies if the insurer becomes impaired or insolvent. COVERAGE MAY NOT BE AVAILABLE FOR YOUR POLICY. Even if coverage is provided, there are significant limits and exclusions. Coverage is always conditioned on residence in this state. Other conditions may also preclude coverage.

The IN LHGA will respond to any questions you may have which are not answered by this document. Your insurer and agent are prohibited by law from using the existence of the association or its coverage to sell you an insurance policy. You should not rely on availability of coverage under the IN LHGA when selecting an insurer.

You may contact the IN LHGA as follows: address, phone, website.
You may contact the IN DOI as follows: address, phone, website."

I have seen nothing on this nor heard anything from our vendor. Once you hear back with the information I would appreciate you passing it on and if I hear something in the mean time I will do the same.

Will do.

The vendor referred me to Bulletin 145 issued by IN DOI Commissioner Jim Atterhold on 2/6/07. I have not had time to look it over in detail yet.

I have a call into my vendor. However reading IC 27-8-8 I'm not sure this covers credit insurance. I think it may just cover group plans and "normal" life and health policies. I'll see what I can find out and let you know.

I have a call into Carol Cutter at the IN DOI asking if this applies to credit life and disability. As soon as I hear back from her I'll let you know what she tells me.

Just a quick update. I had a voice mail form Carol when I got back from lunch. She could find no specific exemption for credit insurance from this disclaimer. However, as I understood her voice mail the disclaimer is the responsibility of the insurance company to provide to the policy holder and not us. So it appears your Vendor may be attempting to shift the burden to you, and that's why we have not heard for ours (yet).

I did place another call to Carol to make sure I did understand her correctly and to make sure this disclaimer does not fall in our laps as "insurance agents" since our lenders are required to be licensed by the state to sell the credit insurance. I'll post again once I hear from her.

OK, I had another voice mail from Carol this morning. She reiterated that those bulletins are only binding for insurers that are members of the ILHGA. The DOI has no jurisdiction over financial institutions other than those that may be members of the ILHGA. It is not our (financial institutions) responbility to provide this disclaimer.

If you have any further questions you can reach her at:

Carol Cutter
317-232-5695

Finally spoke with a compliance rep from our Vendor...this is something they had on their calendar and let it slip by them. Not the first time I've had issues with this company but that's a different issue.

Although we, as financial institutions are not responsible for providing this disclaimer, the insurance company will put the burden of providing the disclaimer on us as their agents. They are having the disclosure printed in pad form for temporary use and shipped to us. The next reprinting of their certificates will have the disclaimer included.