Minnesota Insurance Guarantee Association board allowed to request financial information from insureds.

Insurance claim limits and recovery protections

The law limits which claims the Minnesota Insurance Guarantee Association covers when an insurer fails. For insurer failures after July 31, 1996, insureds with net worth of $25 million or more are excluded. Net worth includes all subsidiaries and affiliates, measured on December 31 of the year before the failure. The board can request financial information and must explain the consequences of not responding. Insureds who do not provide it within 60 days are treated as having net worth above $25 million during claim review. Policies with deductibles or self-insured retentions of $300,000 or more are excluded; amounts within any deductible or retention are also excluded. A self-insured retention is the amount the insured pays before insurance coverage begins. Claims from the failed insurer’s affiliates, fines, penalties, interest, and punitive or exemplary damages are also excluded. Recovery claims owed to insurers, reinsurers, insurance pools, or underwriting associations—including reimbursement, contribution, and indemnity claims—are excluded. Those recovery claims can go to the failed insurer or its liquidator, but not against insureds or benefit recipients. The exception is the part of a claim outside the failed insurer’s policy coverage.