Question

If a paid claim from Guaranty fund is not reimbursed within __________, the Commission may request withholding of tax refund to pay the debt owed.

a) 30 days
b) 60 days
c) 90 days
d) 120 days

Answer 1

The correct period after which the Commission may request withholding of a tax refund to pay a debt owed to a Guaranty fund is 90 days.

Step-by-step explanation:

If a paid claim from a Guaranty fund is not reimbursed within a specified period, the Commission may request the withholding of a tax refund to repay the debt owed. The correct answer to the fill-in-the-blank question is c) 90 days. This is typically stated in the insurance regulations pertaining to state guaranty funds, which are safety nets to pay claims for insolvent insurance companies.

The workings of state guaranty funds often involve a process where the fund pays out claims to insured parties when an insurance company goes bankrupt. If the party responsible for the claim does not reimburse the fund within 90 days, the state may take alternative measures such as requesting the withholding of tax refunds to recover the money.