When the Texas-based Allied Bankers Life Insurance company found itself in a financial position that left it unable to fulfill its commitments to its customers an organization known as the Texas Life and Health Insurance Guaranty Association stepped in. The Texas Life and Health Insurance Guaranty Association took over policies for Allied Bankers Life Insurance when the company became insolvent according to the Association’s website.
The Association was created by the state assembly of Texas as a not-for-profit organization for the purpose of providing protections to people living in Texas that have purchased insurance policies that were issued by a member of the Association. The Association protects Texas consumers by stepping in when one of its members is no longer able to cover policyholders because it has either been liquidated or become insolvent. Texas consumers are often able to continue receiving the coverage that they purchased even when their insurance company goes out of business because the Texas Life and Health Insurance Guaranty Association will either take over coverage and fulfill the financial obligations of the insolvent company or help facilitate the process of switching the policy to another organization.
The insurance business exists because consumers need to manage the risk that comes with owning an asset like a house that could be destroyed by a flood, a car that could be totaled in a high-impact accident or a debilitating injury that requires the regular attention of a medical specialist. Consumers may not necessarily ever need all or any of the services that they can access through their insurance provider but in the event that they do become injured or that their property is destroyed due to circumstances they cannot control they are looking to their insurance company to help them cover the costs that they cannot pay on their own. If insurance companies step into the lives of their consumers to help them through emergencies and freak accidents who steps in when insurance companies find themselves in need of help? This is why organizations like the Texas Life and Health Insurance Guaranty Association exist so that they can make sure that regardless of circumstance that insurance companies like Allied Bankers Life Insurance are able to follow through on their commitments to their customers.