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Meaning / Definition of
State Guaranty Fund
Categories: Insurance, Mutual Funds,
A fund to protect policy owners in the event of an insolvency of an insurance company. Insurance companies contribute to this fund in order to be licensed to sell their products and the proceeds are used to pay policy holders in case the insurance company becomes insolvent. Although it is funded by insurance companies, the fund is administered by a U.S state and consequently, benefits and coverage limits varies from state to state.
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