In the United States, insurance is decentralized. Each state in the Union has its own organization and insurance regulator.
All states and territories have guarantee funds [4] designed to cover, within statutorily defined limits, the financial obligations of a defaulting company towards its policyholders, savers and third parties.
In general, the funds are financed by the participations of insurance companies operating in a given State. The amount of these participations is calculated as a percentage of the premiums written. It varies according to the classes of business covered by the guarantee fund.
In all States, with the exception of New York, which has a special prefunding plan, the system is activated after the insurer has failed.
All Sates have at least two main guarantee funds, one for property and casualty insurance claims and the other for life and health insurance claims and benefits.