Frequently Asked Questions

The Security Fund covers most of the insurance companies licensed to write (issue) insurance or annuities in Wisconsin. However, certain types of insurers are not covered such as fraternal benefit societies, assessable mutual insurers, municipal mutual insurers, limited-service health organizations, motor clubs, service insurers providing only dental and vision coverage, risk retention groups, and surplus lines insurers.

Life and health insurance policies offered to individuals and groups such as life, comprehensive, and supplemental health, long-term care, and annuity contracts are covered.

Property and casualty coverage offered to individuals and businesses such as automobile, homeowners, fire, commercial liability, cyber, professional liability, medical malpractice, and worker's compensation policies are covered.  Examples of some types of insurance not covered are self-funded policies, credit and mortgage insurance, as well as surplus lines policies.

This point in time is referred to as the date coverage is "triggered".  Security Fund coverage is triggered on the date the final liquidation order is issued by the court.

The Security Fund provides protection to policyholders who are Wisconsin residents on the date of liquidation.

For property casualty policies, residents or companies whose principal place of residence / business was Wisconsin on either the date of policy issuance or the date of the insured event is covered.

The Security Fund provides each person in each liquidation coverage up to the lesser of the policy limit or $300,000 of coverage for life, disability and annuities regardless of the number of policies.

A major or comprehensive medical policy coverage up to the lesser of the policy limits or $500,000. While the policy limit takes into account all payments made, the Security Fund's coverage limit only applies to payments made after the liquidation date. Coverage is subject to exclusions and limitations. For example, life and annuity coverage interest crediting is capped and portions of policies or contracts where the policyholder accepted investment risk are excluded from coverage.

The Security Fund only provides continuation of certain non-cancellable or guaranteed renewable life, disability (health) and annuity policies. All other policies are terminated by the receiver after liquidation and consumers must find replacement coverage. Policies continued by the Security Fund are subject to the coverage limitation and premium will continue to be collected and may be increased as permitted by law.

The Security Fund provides each person in each liquidation coverage for each risk or loss up to the lesser of the policy limits or $500,000. Worker's compensation insurance does not have a specific dollar limit and is covered up to the legal limits established in state workers compensation law. While the policy limit will count all payments made, the coverage limit applies to payments made by the Security Fund. Coverage is subject to limitation and exclusions.  Examples of limitations and exclusions are: 1) all other insurance or benefits must be first exhausted; 2) large deductibles are not covered, and 3) policyholders with a net worth in excess of $25 million have limited coverage.

Insurers that sell life and annuity coverage may also offer supplemental contracts that are not an insurance policy or contract. The only type of supplemental contract covered by the Security Fund is a retained asset account (RAA). An RAA is a voluntary non-insurance account held by the insurer for a life insurance policy beneficiary which allows them to draw the policy proceeds over time.

Premiums paid in advance of a policy period are called "unearned premium".  When a consumer pays their premiums on a quarterly, semi-annual or annual basis, they can have substantial "unearned premium" held by the insurer. Unearned premiums are not part of the Security Fund's coverage obligation as defined by Wisconsin Statute 646. However, a policyholder may recover these funds by filing a claim with the receivership estate.

For life and health policies, administration of benefits claims and policy continuation may be done directly by Security Fund staff, a third party contracted by the Security Fund, or be transferred from the Security Fund to a solvent insurer through an assumption agreement.

Property and casualty coverage (claims handling) is done primarily by the Security Fund office, but may on occasion be provided by a third party contracted by the Security Fund.

For life, disability (health) and annuity policies or contracts, future coverage is protected by continuing to make premium payments. Doing so ensures your policy is inforce in the event of a liquidation.  Any changes or elections you make to modify your policy provisions or premiums during rehabilitation will impact your Security Fund coverage.

For property & casualty policies, if you have an open (active) or pending claim covered by your policy, make sure to report the claim and/or provide updates to your insurer. This is also a good time to make sure your current contact information is on file. In the event your insurer becomes insolvent, the receiver will transfer active claims to the Security Fund after liquidation for coverage. We encourage you to closely monitor and open your mail to stay informed and aware of any actions you may need to take.