What is required for the servicing of life insurance policies after an insurer withdraws?

The requirement that policies must remain in force for state residents after an insurer withdraws is crucial for ensuring consumer protection and coverage continuity. Even if an insurer is no longer actively writing new policies or operating within the state, it is essential that existing life insurance policies continue to be honored and maintained. This safeguards policyholders, ensuring they do not lose their coverage unexpectedly and can still access benefits that accrue from their policies.

Maintaining the validity of these policies fulfills the contractual obligations between the insurer and the policyholders, providing them peace of mind knowing that their existing coverage will remain effective regardless of the insurer's operational status in the state. This principle underlines the importance of consumer considerations in the regulatory framework governing insurance practices.