Insurance laws Guam (US)
Guam's insurance laws are codified under Title 22, Division 2, Chapter 18 of the Guam Code Annotated, known as "The Contract of Insurance." These laws regulate various aspects of insurance operations on the island, including the types of insurance permitted, the authority of insurers, and the rights and obligations of policyholders.
🏛️ Regulatory Authority
The Commissioner of Banking and Insurance oversees the insurance industry in Guam This office is responsible for ensuring that insurance companies comply with local laws and regulations, and it is a member of the National Association of Insurance Commissioners (NAIC), aligning Guam's regulatory practices with those of U.S. states
🧾 Types of Insurance Authorized
Guam law permits insurers to offer various classes of insurance, includin:
Fire Insurance Covers loss or damage to property due to fire, lightning, windstorms, cyclones, tornadoes, typhoons, hail, earthquakes, and water from firefighting system.
Marine Insurance Applies to ocean and inland risks, and transportatio.
Life Insurance Includes life, endowment, and annuity policies, but excludes health, accident, or sickness insuranc.
Accident, Sickness, Health, Property Damage, and Liability Insurance Covers various forms of personal and property insurance, including Health Maintenance Organizations (HMOs)
📄 Insurance Contracts and Consumer Protections
*Insurable Interest: A person must have a legitimate interest in the subject matter of the insurance to ensure the contract is vald.
*Direct Action in Liability Policies: In cases of liability insurance, the injured party or their representatives have the right to directly sue the insurer within the policy's terms and limits, even if the policy was not issued in Guam, provided the cause of action arose in Guam
*Policy Form Approval: Health insurance policies must be filed with the Commissioner at least 45 days before their effective date for approval. The Commissioner reviews these forms to ensure they are not misleading, deceptive, or contrary to the public interest
⚖️ Enforcement and Penaltie
Violations of the insurance laws in Guam can result in penaltis For instance, unauthorized insurers may face fines up to $5,00 Additionally, insurers must maintain certain standards in rate-setting to prevent excessive, inadequate, or discriminatory rates, with penalties for non-compliance
🛡️ Mandatory Insurance Requirements
Guam law mandates certain types of insurance for residents and busineses:
*Automobile Liability Insurance: Required for all vehicle owners to operate legally on the islnd.
*Workers' Compensation Insurance: Obligatory for employers to provide coverage for employees in case of work-related injuries or illnesses
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