What is the purpose of the Florida Insurance Guaranty Association?

The Florida Insurance Guaranty Association (FIGA) is designed specifically to protect policyholders in the event that an insurance company becomes insolvent. When an insurer cannot fulfill its obligations due to financial failure, FIGA steps in to ensure that the policyholders do not lose their coverage or financial benefits. This association operates by covering claims that would otherwise go unpaid due to the insurer's insolvency, thereby safeguarding consumer interests and maintaining stability within the insurance market.

The other options, while related to the broader insurance industry, do not accurately reflect the core function of FIGA. Assisting insurers with financial stability falls outside the scope of FIGA's responsibilities, as its primary role is to respond to situations affecting consumers rather than providers. Overseeing insurance rate approvals and regulating agents' licensing requirements pertain to regulatory functions generally conducted by state insurance departments, not FIGA. Thus, the primary aim of the Florida Insurance Guaranty Association centers on protecting insured individuals from the impacts of insurer insolvency.