Ohio § 3956.04

§ 3956.04.

(A) This chapter provides coverage, by the Ohio life and health insurance guaranty association,

for the policies and contracts specified in division (C) of this section to all of

the following persons: (1) Persons, regardless of where they reside, except for nonresident certificate holders

or enrollees under group policies or contracts, who are the beneficiaries, assignees,

or payees, including health care providers rendering services covered under health

insurance policies or certificates, of the persons covered under division (A)(2) of

this section; (2) Persons who are owners of or certificate holders or enrollees under the policies

or contracts other than structured settlement annuities and unallocated annuity contracts

if either of the following applies: (a) The persons are residents of this state. (b) The persons are not residents of this state and all of the following conditions apply: (i) The member insurer that issued the policies or contracts is domiciled in this state. (ii) The persons are not eligible for coverage by an association in any other state due

to the fact that the insurer or health insuring corporation did not hold a license

or certificate of authority in the states in which the persons reside at the time

specified in the state's guaranty association laws. (iii) The states have associations similar to the association created by section 3956.06 of the Revised Code . (3) Persons who are the owners of unallocated annuity contracts specified in division

(C) of this section when those contracts meet either of the following criteria: (a) The contracts are issued to or in connection with a specific benefit plan whose plan

sponsor has its principal place of business in this state. (b) The contracts are issued to or in connection with government lotteries if the owners

are residents of this state. (4) Persons who are payees, or the beneficiary of a payee if the payee is deceased, under

a structured settlement annuity if the payee is a resident of this state, regardless

of where the contract owner resides; (5) Persons who are payees, or the beneficiary of a payee if the payee is deceased, under

a structured settlement annuity if the payee is not a resident of this state, but

both of the following are true: (a) The contract owner of the structured settlement annuity is a resident of this state

or, if the contract owner of the structured settlement annuity is not a resident of

this state, the insurer that issued the structured settlement annuity is domiciled

in this state and the state in which the contract owner resides has an association

similar to the association created by this chapter. (b) The payee, the beneficiary, and the contract owner are not eligible for coverage

by the association of the state in which the payee or contract owner resides. This chapter is intended to provide coverage to a person who is a resident of this

state and, in special circumstances, to a nonresident.  To avoid duplicate coverage, if a person who would otherwise receive coverage under

this chapter receives coverage under the laws of another state, the person shall not

be provided coverage under this chapter.  In determining the application of the provisions of this chapter in situations in

which a person could be covered by the association of more than one state, whether

as an owner, payee, enrollee, beneficiary, or assignee, this chapter shall be construed

in conjunction with other state laws to result in coverage by only one association. (B) This chapter shall not provide coverage to any of the following: (1) A person who is a payee, or beneficiary, of a contract owner resident of this state,

if the payee or beneficiary is afforded any coverage by the association of another

state; (2) A person covered under division (A)(3) of this section, if any coverage is provided

by the association of another state to the person; (3) A person who acquires rights to receive payments through a structured settlement

factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A) , regardless of whether the transaction occurred before or after such section became

effective. (C)(1) This chapter provides coverage to the persons specified in division (A) of this section

for direct, nongroup life insurance, health insurance, which for the purposes of this

chapter includes sickness and accident insurance policies and contracts, and health

insuring corporation subscriber policies, contracts, certificates, and agreements,

or annuities, for certificates under direct group policies and contracts, for supplemental

contracts to any of the preceding, and for unallocated annuity contracts, in each

case issued by member insurers, except as otherwise limited in this chapter.  Annuity contracts and certificates under group annuity contracts include, but are

not limited to, guaranteed investment contracts, deposit administration contracts,

unallocated funding agreements, allocated funding agreements, structured settlement

annuities, annuities issued to or in connection with government lotteries, and any

immediate or deferred annuity contracts. (2) Except as provided in division (C)(3) of this section, this chapter does not provide

coverage for any of the following: (a) Any portion of a policy or contract not guaranteed by the member insurer, or under

which the risk is borne by the policy or contract holder; (b) Any policy or contract of reinsurance, unless assumption certificates have been issued

pursuant to the reinsurance policy or contract; (c) Any portion of a policy or contract to the extent that the rate of interest on which

it is based, or the interest rate, crediting rate, or similar factor determined by

use of an index or other external reference stated in the policy or contract employed

in calculating returns or changes in value: (i) Averaged over the period of four years prior to the date on which the association

becomes obligated with respect to the policy or contract or if the policy or contract

has been issued for a lesser period averaged over that period, exceeds the rate of

interest determined by subtracting two percentage points from the monthly average-corporates

as published by Moody's investors service, inc., or any successor to that service,

averaged for the same period; (ii) On and after the date on which the association becomes obligated with respect to

the policy or contract, exceeds the rate of interest determined by subtracting three

percentage points from the monthly average-corporates as published by Moody's investors

service, inc., or any successor to that service, as most recently available. If the monthly average-corporates is no longer published, the superintendent, by rule,

shall establish a substantially similar average. (d) Any plan or program of an employer, association, or similar entity to provide life,

health, or annuity benefits to its employees or members to the extent that the plan

or program is self-funded or uninsured, including but not limited to benefits payable

by an employer, association, or similar entity under any of the following: (i) A multiple employer welfare arrangement as defined in section 3(40) of the “Employee

Retirement Income Security Act of 1974,” 88 Stat. 833, 29 U.S.C.A. 1002(40) , as amended; (ii) A minimum premium group insurance plan; (iii) A stop-loss group insurance plan; (iv) An administrative services only contract. (e) Any portion of a policy or contract to the extent that it provides dividends, voting

rights, or experience rating credits, or provides that any fees or allowances be paid

to any person, including the policy or contract holder, in connection with the service

to or administration of the policy or contract; (f) Any policy or contract issued in this state by a member insurer at a time when it

was not licensed or did not have a certificate of authority to issue the policy or

contract in this state; (g) Any unallocated annuity contract issued to an employee benefit plan protected under

the federal pension benefit guaranty corporation, regardless of whether the federal

pension benefit guaranty corporation has yet become liable to make any payments with

respect to the benefit plan; (h) Any portion of any unallocated annuity contract that is not issued to or in connection

with a governmental lottery or a benefit plan of a specific employee, union, or association

of natural persons; (i) Any portion of a policy or contract to the extent that the assessments required by section 3956.09 of the Revised Code with respect to the policy or contract are preempted by federal or state law; (j) Any obligation that does not arise under the express written terms of the policy

or contract issued by the member insurer to the enrollee, certificate holder, contract

owner, or policy owner, including all of the following: (i) Claims based on marketing materials; (ii) Claims based on side letters, riders, or other documents that were issued by the

member insurer without meeting applicable policy or contract form filing or approval

requirements; (iii) Misrepresentations of or regarding policy or contract benefits; (iv) Extra-contractual claims; (v) A claim for penalties or consequential or incidental damages. (k) A contractual agreement that establishes the member insurer's obligations to provide

a book value accounting guaranty for defined contribution benefit plan participants

by reference to a portfolio of assets that is owned by the benefit plan or its trustee,

which in each case is not an affiliate of the member insurer; (l) Any policy or contract providing hospital, medical, prescription drug, or other health

care benefits pursuant to 42 U.S.C. Chapter 7 , Title XVIII, Parts C and D or 42 U.S.C. Chapter 7 , Title XIX and any corresponding regulations; (m) Structured settlement annuity benefits to which a payee or the beneficiary of a payee,

if the payee is deceased, has transferred his or her rights in a structured settlement

factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A) , regardless of whether the transaction occurred before or after such section became

effective; (n)(i) A portion of a policy or contract to the extent it provides for interest or other

changes in value to be determined by the use of an index or other external reference

stated in the policy or contract, but which have not been credited to the policy or

contract, or as to which the policy or contract owner's rights are subject to forfeiture,

as of the date the member insurer becomes an impaired or insolvent insurer under this

chapter, whichever is earlier. (ii) If a policy's or contract's interest or changes in value are credited less frequently

than annually, then for purposes of determining the values that have been credited

and are not subject to forfeiture under division (C)(2)(n) of this section, the interest

or change in value determined by using the procedures defined in the policy or contract

will be credited as if the contractual date of crediting interest or changing values

was the date of impairment or insolvency, whichever is earlier, and will not be subject

to forfeiture. (3) The exclusion from coverage referenced in division (C)(2)(c) of this section shall

not apply to any portion of a policy or contract, including a rider, that provides

long-term care or any other health insurance benefits. (D) The benefits for which the association may become liable shall not exceed the lesser

of either of the following: (1) The contractual obligations for which the member insurer is liable or would have

been liable if it were not an impaired or insolvent insurer; (2)(a) With respect to any one life, regardless of the number of policies or contracts: (i) Three hundred thousand dollars for life insurance death benefits, but not more than

one hundred thousand dollars in net cash surrender and net cash withdrawal values

for life insurance; (ii) One hundred thousand dollars for health insurance benefits other than health benefit

plan coverage, disability income insurance, or long-term care insurance, including

any net cash surrender and net cash withdrawal values; (iii) Three hundred thousand dollars for disability income insurance; (iv) Three hundred thousand dollars for long-term care insurance; (v) Five hundred thousand dollars for health benefit plan coverage; (vi) Two hundred fifty thousand dollars for the present value of annuity benefits, including

net cash surrender and net cash withdrawal values. (b) With respect to each individual participating in a governmental retirement plan established

under section 401, 403(b), or 457 of the “Internal Revenue Code of 1986,” 100 Stat.

2085, 26 U.S.C.A. 1 , as amended, and covered by an unallocated annuity contract, or the beneficiaries

of each such individual if deceased, in the aggregate, two hundred fifty thousand

dollars in present value annuity benefits, including net cash surrender and net cash

withdrawal values. The association is not liable to expend more than three hundred thousand dollars in

the aggregate with respect to any one individual under divisions (D)(2)(a), (b), and

(d) of this section combined, except with respect to benefits for health benefit plan

coverage under division (D)(2)(a)(v) of this section, in which case the aggregate

liability of the association shall not exceed five hundred thousand dollars with respect

to any one individual. (c) With respect to any one contract holder, covered by any unallocated annuity contract

not included in division (D)(2)(b) of this section, five million dollars in benefits,

irrespective of the number of contracts held by that contract holder. (d) With respect to each payee of a structured settlement annuity, or the beneficiary

or beneficiaries of the payee if the payee is deceased, two hundred fifty thousand

dollars in present value of annuity benefits, in the aggregate, including net cash

surrender and net cash withdrawal values, if any; (e)(i) The limitations set forth in this division are limitations on the benefits for which

the association is obligated before taking into account either its subrogation and

assignment rights or the extent to which those benefits could be provided out of the

assets of the impaired or insolvent insurer attributable to covered policies. (ii) The costs of the association's obligations under this chapter may be met by the use

of assets attributable to covered policies or reimbursed to the association pursuant

to its subrogation and assignment rights. (E) The liability of the association is limited strictly by the express terms of the

policies or contracts and by this chapter, and is not affected by the contents of

any brochures, illustrations, advertisements in the print or electronic media, or

other advertising material used in connection with the sale of the policies or contracts,

or by oral statements made by agents or other sales representatives in connection

with the sale of the policies or contracts.  The association is not liable for extra-contractual damages, punitive damages, attorney's

fees, or interest other than as provided for by the terms of the policies or contracts

as limited by this chapter, that might be awarded by any court or governmental agency

in connection with the policies or contracts. (F) The protection provided by this chapter does not apply where any guaranty protection

is provided to residents of this state by the laws of the domiciliary state or jurisdiction

of the impaired or insolvent insurer other than this state. (G) For purposes of this chapter, benefits provided by a long-term care rider to a life

insurance policy or annuity contract shall be considered the same type of benefits

as the base life insurance policy or annuity contract to which it relates. (H) In performing its obligations to provide coverage under section 3956.08 of the Revised Code , the association shall not be required to guarantee, assume, reinsure, reissue, or

perform, or cause to be guaranteed, assumed, reinsured, reissued, or performed, the

contractual obligations of the insolvent or impaired insurer under a covered policy

that do not materially affect the economic values or economic benefits of the covered

policy.