Insurer Failures:

Property/Casualty Insurer Insolvencies and State Guaranty Funds

GGD-87-100: Published: Jul 28, 1987. Publicly Released: Jul 28, 1987.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In response to a congressional request, GAO provided information on property/casualty insurance company insolvencies, specifically the: (1) incidence of insolvencies; (2) characteristics of selected insolvent companies; and (3) system of state guarantee funds established to pay claims against insolvent insurance companies.

GAO found that: (1) the incidence of insolvencies has generally followed the profitability cycle of the property/casualty insurance industry, and has been geographically widespread; (2) there were about 140 insolvencies from 1969 through 1986, 42 percent of which occurred after 1983; (3) the number of companies designated for regulatory attention due to troubling financial conditions increased from 132 in 1978 to 590 in 1986; (4) insolvencies in the late 1960's and 1970's generally could be attributed to companies that were small, handled mostly automobile insurance, and operated in one state or on a regional basis; and (5) there were no characteristics or trends common to the companies that were liquidated from 1977 through 1986. GAO also found that: (1) claims against insolvent insurers are paid from assessments states levy on the companies they license; (2) there is considerable variation in states' administration of such funds; and (3) inconsistencies in state fund laws have caused confusion and conflict and raised questions on whether the state-by-state approach is appropriate.

May 26, 2016

Apr 14, 2016

Apr 11, 2016

Mar 21, 2016

Feb 8, 2016

Jan 27, 2016

Nov 16, 2015

Oct 28, 2015

Sep 8, 2015

Jul 27, 2015

Looking for more? Browse all our products here