Nonprofit, unincorporated associations established in all states to pay the outstanding claims of insolvent primary insurers.

• A. Assigned Risk Plans
• B. Monopolistic State Fund
• C. State Guaranty Funds
• D. Self-Insured Groups

Answer: (C)

State guaranty funds exist to protect policyholders and claimants when an insurer becomes insolvent. They are nonprofit, unincorporated associations created by state law, and when a primary insurer fails, the fund steps in to pay the remaining, unpaid claims—often including workers’ compensation claims—up to statutory limits. They’re financed by assessments on solvent insurers operating in the state, not by taxpayers or policyholders directly. This setup matches the description of nonprofit, unincorporated associations established in all states to pay the outstanding claims of insolvent primary insurers. Other structures serve different purposes: assigned risk plans place high-risk auto risks with insurers, monopolistic state funds are state-run programs for coverage in certain states, and self-insured groups are employers that pay their own claims rather than using insurance.