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The association that guarantees life and health insurance policies in Massachusetts is assessing its members for only the second time in its history.
The Massachusetts Life and Health Insurance Guaranty Association will collect more than $50 million to cover Massachusetts policyholder losses from the insolvency of Executive Life, a California-based insurance company. While the Guaranty Association's previous assessment helped only about 20 Massachusetts consumers, its Executive Life assessment is expected to aid thousands.
The Massachusetts Life and Health Insurance Guaranty Association was formed in 1987 to provide limited coverage to Massachusetts residents who have policies with life or health insurance companies that become insolvent, said Ray Hathaway, senior vice president and secretary of John Hancock Mutual Life Insurance Co.
Follows national model
It doesn't matter where the company is based, as long as it is licensed in Massachusetts. About 600 life insurance companies are licensed by Massachusetts' Division of Insurance, according to Hathaway, who serves as secretary/treasurer of the Guaranty Association.
The Guaranty Association was established by a state statute that generally follows a …