Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Imagine this scenario–Mega Store has its primary insurance coverage with Super Insurance Company, which was recently declared insolvent and ordered liquidated by a court; Super Insurance was domiciled in Mega Store’s home state (a small southern state). Super Insurance Company also insured a number of other large retailers and corporations around the country in addition to writing some personal lines. Super ran into financial difficulties due to the severe underpricing of their various lines of business along with excessive losses with a bit of corporate fraud thrown in on top, thus rendering them statutorily insolvent and unable to pay their claims. The various state guaranty associations (GAs) are triggered by the liquidation order to fulfill their statutory obligations.

Mega Store is worth billions of dollars. Their primary insurance policy limits and outstanding claims amounts alone would exhaust the entire yearly guaranty assessment capacity of the other than auto assessment account for that guaranty association even with the application of the per claim statutory limitations.

This premium content is locked for
FC&S Expert Coverage Interpretation subscribers.

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis

Already have an account?
For enterprise-wide or corporate access, please contact our Sales Department at 1-800-543-0874 or email [email protected].

Bethany Akerman


Get Answers Directly From the FC&S Experts

Submit your coverage interpretation question to the editors of FC&S for quick and reliable information.

Question of the Week

Insurance Coverage Q&A: A Retaining Wall and Water Accumulation ›

Water behind a retaining wall causes it to collapse. Could the failure of drains to remove the water make this a water backup situation?

Question of the Week Archive ›

Copyright © 2023 ALM Global, LLC. All Rights Reserved.