Kentucky Life & Health Insurance Guaranty Association

The Kentucky Life and Health Insurance Guaranty Association (KLHIGA) stands as a safety net for Kentucky residents who hold life insurance, accident and health insurance, health maintenance organization (HMO) contracts, or annuity contracts. Our mission is clear: to protect policyholders during times of financial hardship caused by the insolvency of their insurance provider. We achieve this by stepping in on behalf of insolvent member insurers to ensure continued coverage and benefit payments to eligible Kentucky residents.

Guiding Principles and Legal Framework

KLHIGA operates under the Kentucky Life and Health Insurance Guaranty Association Act (the Act), a comprehensive legal framework that defines our scope, limitations, and responsibilities. Enacted in 1978 and subsequently amended, the Act mandates that all Kentucky-licensed life insurance companies, health insurance companies, and HMOs become members of KLHIGA (member insurers). These member insurers contribute funds to a reserve pool, which is strategically utilized to fulfill KLHIGA's protective role.

Responding to Insolvency

The Act empowers KLHIGA to activate upon the court-ordered liquidation of a member insurer. In such situations, KLHIGA assumes the responsibility of servicing existing insurance or HMO contracts of Kentucky residents affected by the insolvency. This includes processing claims, paying benefits, and diligently maintaining policy coverages in accordance with the terms, conditions, and limitations outlined in the Act.

Understanding Coverage Limits and Exclusions

While KLHIGA strives to provide comprehensive protection, it's crucial for policyholders to understand that coverage is not without limits. The Act establishes maximum benefit payouts for individual lives when multiple policies or contracts are held by a single person or when multiple lives are insured under a single policy. Furthermore, certain types of policies, including those categorized as speculative investments or long-term care policies, may be excluded from coverage under the Act. Comprehensive details regarding these limitations and exclusions are readily available in the Frequently Asked Questions section of our website.

Collaboration and National Network

KLHIGA is an active participant in the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA), a nationwide network of state-based guaranty associations dedicated to safeguarding policyholders across the United States. This collaborative framework ensures consistent responses to insolvencies involving insurers licensed in multiple states, promoting efficient and coordinated resolutions for policyholders nationwide.

It's equally important to note that while KLHIGA focuses on life, health, and annuity coverage, a separate association exists in Kentucky to address claims arising from policies issued by property and casualty insurance companies-the Kentucky Insurance Guaranty Association (KIGA).

This website serves as a valuable resource for general information about KLHIGA and its role in protecting Kentucky residents. While we endeavor to maintain the site's accuracy and currency with respect to the Act and related laws, it is imperative to remember that this information does not constitute definitive legal advice.

Operational Structure

KLHIGA is governed by a Board of Directors comprising six member insurers, who provide strategic oversight and ensure that our operations align with the provisions of the Act. We are further supported by an Executive Director and a team of independent professionals and service agencies, who are engaged on an as-needed basis to effectively execute KLHIGA's responsibilities.