Full text and statutory guidelines for the Post Assessment Property and Liability Insurance Guaranty Association Model Act.
The Washington Post Assessment Property and Liability Insurance Guaranty Association Model Act (WAPALIGAMA) is a regulatory framework that provides protection and benefits to policyholders in the event of an insolvency of an insurance company operating within the state of Washington. This act ensures that policyholders' rights and claims are upheld even if their insurance company becomes insolvent. The WAPALIGAMA model act has two main components — the Property Insurance Guaranty Association (PIG) and the Liability Insurance Guaranty Association (LISA). These associations work independently but share similar objectives of protecting policyholders against the financial collapse of insurers. 1. Property Insurance Guaranty Association (PIG): PIG focuses primarily on property insurance policies, covering residential, commercial, or industrial real estate. This association steps in to pay covered claims when an insurer becomes insolvent, providing relief to policyholders and maintaining confidence in the insurance market. 2. Liability Insurance Guaranty Association (LISA): LISA, on the other hand, deals with liability insurance policies, protecting policyholders against legal claims arising from personal injury, property damage, or negligence. LISA ensures that the claims of policyholders are honored if an insurer becomes insolvent, safeguarding their financial security and ensuring stability in the liability insurance market. The Washington Post Assessment Property and Liability Insurance Guaranty Association Model Act aims to establish a fair and effective system for handling insurance insolvencies, by spreading the costs associated with insolvent insurers among all insurance companies operating within the state. This ensures that the burden of protecting policyholders is shared among the industry, preventing a few companies from shouldering the entire load. Under the WAPALIGAMA, insurance companies are required to contribute funds to the respective guaranty associations, proportionate to their market share and premiums written. These funds collectively form the guaranty association's pool, which is used to pay the claims of policyholders affected by an insolvency. The act further outlines the responsibilities, powers, and procedures of the guaranty associations, such as claim filing requirements, time limits, and the process for recovering funds from insolvent insurers' estates. It also establishes guidelines for the selection and approval of board members for the associations to ensure they are representative of the insurance industry and policyholders' interests. The Washington Post Assessment Property and Liability Insurance Guaranty Association Model Act not only provides financial protection to policyholders but also contributes to the stability and confidence in the insurance marketplace. By mitigating the adverse consequences of insurer insolvencies, it ensures that policyholders have continued access to essential insurance coverage and support when they need it the most.
