Arkansas Life and Health Insurance Practice Exam

The Life and Health Insurance Guarantee Association:

1. Protects non-resident policyowners and beneficiaries in case a domestic insurer becomes insolvent

2. Protects non-resident policyowners and beneficiaries in case a foreign insurer becomes insolvent

3. Protects resident policyowners and beneficiaries in case a domestic insurer becomes insolvent

4. Protects resident policyowners and beneficiaries in case a foreign insurer becomes insolvent

The correct answer is: Protects non-resident policyowners and beneficiaries in case a domestic insurer becomes insolvent

The Life and Health Insurance Guarantee Association is an organization that protects policyowners and beneficiaries in the event that an insurance company becomes insolvent. In the context of non-residents, this coverage is provided when a domestic insurer (an insurer within the policyholder's home state) becomes insolvent. This association does not typically cover policyholders affected by insolvency of foreign insurers, whether they are residents or non-residents. Therefore, option A is the correct choice as it accurately reflects the role and function of the Life and Health Insurance Guarantee Association.