For Consumers

What happens when your insurance company is financially troubled

Although rare, if your insurance company experienced financial issues or became financially unstable, we have a plan:

Steps we take

Depending on the degree of the problem, we may:

  • Suspend or stop an insurance company from selling new policies until it fixes its problems. This suspension only impacts new business. It does not impact existing customers.
  • Ask a court for a rehabilitation order. This allows us to step in to run the company and try to improve the financial situation.
  • Ask a court for a liquidation order if we can't fix the financial situation. This forces the company out of business and all their policies go to another insurance company that we choose or to one of our state's Guaranty Associations.

Out-of-state insurance companies

If your insurance company is based in another state, then that state's insurance department will step in if the company has financial issues. Many Washington state consumers experienced this with their Penn Treaty long-term care policies.