Frequently Asked Questions
FWCIGA is part of a non-profit, state-based, statutorily-created system that pays certain outstanding claims of insolvent workers’ compensation insurance companies and self-insurance funds. By paying these claims, guaranty associations protect policyholders and claimants.
Guaranty associations are active in every state, the
A guaranty association system also exists in
Guaranty associations ease the burden on policyholders and claimants of the insolvent insurer by immediately stepping in to assume responsibility for most policy claims following liquidation. The coverage guaranty associations provide is fixed by the policy or state law; they do not offer a “replacement policy.”
By virtue of the authority given to the guaranty associations by state law, they are able to provide two important benefits: prompt payment of covered claims and payment of the full value of covered claims up to the limits set by the policy or state law.
The potential failure of insurance companies, like the potential failure of all businesses, is an unfortunate, but inevitable, part of doing business in a free-market system. Since inception of the property and casualty guaranty association system, there have been about 600 insolvencies. In all, the system has paid out about $24.2 billion.
FWCIGA is largely funded by industry assessments, which are collected following insolvencies. These assessments raise funds to pay claims and administrative and other costs related to the FWCIGA’s claim paying activities.
FWCIGA’s assessments are capped at 2% for insurance companies and 1.5% for self-insurance funds net direct premium written in
FWCIGA’s assessments are computed and billed based on the immediate needs of the guaranty association that has claims it needs to pay. Claim files come in from the insolvent insurance company; the adjusters review them, and set appropriate reserves on those files. (Reserves are the projected ultimate liability under terms of a given policy.)
Liquidation is similar to bankruptcy. When a company is liquidated, the Liquidator (also referred to as the Receiver), collects the assets of the company and verifies the liabilities such as claim payments and bills. The Liquidator then develops a plan to distribute the company’s assets according to the law and submits the plan to the Court for approval.
Most liquidation orders cancel all policies within a certain time period after liquidation, typically 30 days.
You will need to obtain coverage with another insurance company. However, we do not recommend any particular company. You may contact any licensed insurance agent to get the names of other insurers.
The processing and payment of pending covered claims will be made by FWCIGA.
You may contact the Florida Workers’ Compensation Insurance Guaranty Association (FWCIGA) at;
(866) 909-9200 Toll Free
(850) 523-1887 FAX
A covered claim is defined in the FWCIGA statute (F.S.631.904) as “… “Covered claim” means an unpaid claim, including a claim for return of unearned premiums, which arises out of, and is within the coverage of, and not in excess of, the applicable limits of an insurance policy…”.
Yes. FWCIGA limits the amount they pay to the amount of coverage provided by the policy. However,
It varies, but claim payments usually begin as soon as possible once a company is ordered liquidated. FWCIGA, coordinating with the receivers of the liquidating companies, works hard to avoid any interruption in periodic benefits that are being paid to claimants, such as workers’ compensation loss-of-wages payments.
No. FWCIGA is designed as a safety net to pay certain claims arising out of policies issued by licensed insurance companies and self-insurance funds. FWCIGA does not pay non-policy claims or claims of individual self-insured’s, or other entities that are exempt from participation in the guaranty association system.
FWCIGA coverage is limited to licensed insurers and self-insurance funds (the members of the guaranty associations that, in turn, pay insolvency-related assessments.) When a licensed insurance company or self-insurance fund becomes insolvent, the FWCIGA pays eligible claims; but a company does not have guaranty association coverage if it is writing non-admitted or unlicensed products, such as surplus lines or is a self-insurer covered in the non-admitted market.
These limits on guaranty association coverage are necessary to balance the need to provide a safety net to those who would be most harmed by the insolvency of their insurance company and keep the burden of providing the safety net at an acceptable level.
FWCIGA is administered by a board that is elected by the guaranty association members (that is, all companies writing licensed business in that state), the Florida Consumer Advocate and a Chief Financial Officer appointee. There is oversight authority by the Florida Department of Financial Services, who reviews the association’s plan of operation, and may also audit a guaranty association. In
While many of the associations are based on a model set forth by the National Association of Insurance Commissioners (NAIC), there are differences in statutes that govern the associations and their operation from state to state, including the amount of coverage provided by the association.
FWCIGA will pay unearned premium claims after the Receiver completes its processing of the policy records and sends the unearned premium record to FWCIGA. This may take several weeks or several months depending on the condition of the data at the insolvent insurance company.