North Carolina Insurance Guaranty Associ

What it reported doing in 2024

Per North Carolina general statutes of chapter 58, article 36, one of the North Carolina insurance guaranty association's responsibilities is to provide a "mechanism for the payment of covered claims under certain insurance policies". Funds for the payment of covered claims are received from the following sources:1) the North Carolina department of insurance notifies the guaranty association when a court of competent jurisdiction declares an insurance company insolvent. After the notification, the guaranty management staff makes a formal request for the insolvent insurance company's security deposit (all licensed insurance companies in North Carolina are required to make a security deposit payment to the department of insurance). This security deposit will be used to pay the insolvent company's unpaid claims and unearned premiums.2) the guaranty association may also receive proceeds from the insolvent company's liquidator. The guaranty association does not have advance notice of when liquidator funds will be remitted. The liquidator proceeds are also used to make unpaid claim and unearned premium payments. The liquidators also transfer claim data to the guaranty association.the guaranty association's claims staff is responsible for reviewing claim detail and ensuring it meets requirements to be processed. Once the claims adjusters determine the requirements have been met, the claims adjusters will activate the claim file and begin to process claim unpaid claims and unearned premiums payments. As of the end of calendar year 2024, there were 44 insolvencies with a total of 249 open claims. A total of 8,225 claims have been closed. Total claims expense and premium refund expenses totaled $5,975,951 and $9,528, respectively.

Financial Efficiency

• Mission deployment rate: Limited
• Program expense ratio: Limited
• Fundraising efficiency: Limited

Transparency & Controls

• Consistency checks: 100%; rating input score 100; 62nd percentile among comparable filings
• Pay-setting controls: 3 of 6 controls in place; rating input score 50
  • Compensation committee: Pass
  • Independent consultant: Missing
  • Other Form 990s reviewed: Missing
  • Written employment contract: Missing
  • Compensation survey or study: Pass
  • Board or committee approval: Pass
• Foreign activity oversight: Limited
• Grant itemization coverage: Limited
• Major donor itemization: Limited
• Related-party transparency: Limited

Accountability

• Independent voting board: 100%; rating input score 100; 66th percentile among comparable filings
• Governance controls: 7 of 9 controls in place; rating input score 78
  • Conflict-of-interest policy: Pass
  • Whistleblower policy: Pass
  • Document-retention policy: Fail
  • CEO compensation review process: Pass
  • Other executive compensation review process: Pass
  • Form 990 shared with the board: Fail
  • Board meeting minutes documented: Pass
  • Audit committee oversight: Pass
  • Independent financial-statement audit: Pass

Sustainability

• Operating margin: -51.7%; rating input score 1; 1st percentile among comparable filings
• Total-asset coverage ratio: 5.08; rating input score 85; 85th percentile among comparable filings
• Liabilities to assets ratio: 0; rating input score 99; 99th percentile among comparable filings
• Officer compensation ratio: 4.6%; rating input score 55; 55th percentile among comparable filings

Growth

• Program expense growth: Limited
• Revenue growth: 0.9% per year; rating input score 100; 11th percentile among comparable filings
• Asset growth: 3.9% per year; rating input score 100; 28th percentile among comparable filings