What must the Guaranty Association do if it needs to notify insureds of insolvency?

The Guaranty Association is responsible for protecting policyholders in the event that an insurance company becomes insolvent. One of its critical duties is to ensure that all affected insureds are informed about the insolvency. Mailing notifications to the last known addresses of the policyholders is the most effective and comprehensive method to reach them, ensuring that even if they do not have access to electronic communication or do not regularly visit websites, they still receive important information about their coverage status and next steps.

This approach is also consistent with regulatory standards that prioritize clear and formal communication to policyholders, enabling the Guaranty Association to fulfill its obligations transparently. Relying solely on email, for instance, may not reach all policyholders, especially those who do not regularly check their email accounts or those who may not have provided an email address. Posting on a website could miss individuals who aren’t aware of the Guaranty Association or who do not frequently visit the site. Notifying only large policyholders would be inappropriate, as it would exclude small policyholders who also require timely information. Therefore, mailing notifications to last known addresses serves as a reliable and inclusive method for the Guaranty Association to communicate important news regarding insolvency to all insureds.