2024 Insolvency Cost Information Report Now Available

NOLHGA has issued its annual Insolvency Cost Information Report, which assists member companies in establishing accruals for life, annuity, and health insurance guaranty association assessments. The report contains information regarding the cost of insolvencies, assessable premium by state, and summaries of each state’s general assessment and premium tax offset provisions.

These reports have been issued by NOLHGA annually since 1992. This year’s report is available for download from NOLHGA’s website in the Insolvency Costs section. The report contains the following data files:

Insolvency Costs Workbook: An Excel workbook with individual insolvency cost information along with various summary schedules and premium information by state.

Insolvency Costs Report: A PDF file that includes commentary on various insolvencies along with the schedules from the Costs file. Also included are general assessment and premium tax offset state provisions along with premiums by state.

This year’s report includes updated information on the Global Bankers companies (Colorado Bankers Life and Bankers Life), which were placed in liquidation on November 30, 2024.

Summary assessment information (called and refunded) as of year-end 2023 has been included on each insolvency case for use by member companies in their accrual process as they deem necessary. This information is compiled from the annual assessment submissions of each guaranty association and is not audited by NOLHGA. As a result, NOLHGA will not be able to address any questions that member companies may have on the accuracy or completeness of the information. Those inquiries should be directed to the appropriate guaranty association.

The report also features the segregation of costs associated with long-term care (LTC) due to amendments to the NAIC’s GA Model Act made in 2017, which included a new method for allocating LTC assessments beginning with cases occurring in 2018 or later. The new method allocates assessments associated with LTC business 50/50 between life/annuity and health insurance member companies (as defined in the new Model Act amendment), assuming the state adopted the 50/50 ratio in the new Model Act.

While LTC business had previously been assessed solely under the health account, assessments will now be allocated among all applicable accounts (life, allocated and unallocated annuity, and health) according to the formula spelled out in the state’s guaranty association statute. For states that have adopted the new allocation method, LTC costs have been segregated from other health business. When accruing for LTC costs, companies will have to use the premiums from all their accounts to determine their market share to apply to the cost estimate.

Please note that some of the financial schedules will print in very small text and may be difficult to read. If the text is too small, it might help to set those pages to legal size and print them separately from the rest of the report.