What protects life and health owners in the event of an insurer's impairment or insolvency?

The California Life and Health Insurance Guarantee Association (CLHIGA) is established specifically to protect policyholders when an insurer becomes insolvent or impaired. This means that if an insurance company cannot fulfill its obligations to its policyholders due to financial difficulties, the CLHIGA steps in to ensure that those policyholders receive payment for covered claims up to certain limits. This safety net is crucial for maintaining consumer confidence in the insurance industry, as it assures policyholders that their life and health insurance benefits are secure even in the event of an insurer's financial troubles.

Medi-Cal serves a different purpose, as it is California's Medicaid program designed to provide health coverage for low-income individuals, rather than addressing issues related to insurance company insolvency. The Omnibus Budget Reconciliation Act (OBRA) pertains to federal legislation affecting various aspects of health care financing and services but does not specifically provide protections against insurance company insolvency. Hence, those options do not relate to the specific protective measures in place for life and health insurance policyholders facing insurer insolvency.