About LIGA

History and Background

Prior to 1970, there was no insurance safety net in Louisiana.  If an insurance company was declared insolvent, the policyholder or claimant had to file a claim in the liquidation proceeding.  Any assets from the insolvent insurer would eventually be divided among hundreds or thousands of creditors and claimants according to rank.  These bankruptcy-like proceedings usually took years and rarely resulted in the significant payment of most claims.

In 1970, the Legislature created the Louisiana Insurance Guaranty Association (“LIGA”) as a private, non-profit entity designed to create a safety net for insurance consumers if their insurer becomes insolvent during the period of their policy coverage.  LIGA steps in to pay certain statutorily defined claims.  The payment of claims by LIGA has been a continuing source of reliability and relief to thousands of families and companies whose loss would have otherwise gone unpaid.  LIGA covers property and casualty insureds only.

Some people compare LIGA to the FDIC, which protects the public when a bank becomes insolvent.  When you buy your insurance from a licensed company in Louisiana you have the peace of mind as a consumer, knowing that your claim will be addressed, even if something unfortunate and unexpected happens to your insurance company.

The stabilization created by LIGA also inures to the benefit of all insurers in Louisiana.

There is another guaranty association system, which covers policyholders of life insurance policies, health insurance policies and annuities sold in Louisiana.  Information on that protection through that system is available through the Louisiana Life and Health Insurance Guaranty Association (LLHIGA), 620 Florida St, Ste. 210, Baton Rouge, LA 70801, 225-381-0656.