Which of the following describes the role of the Life and Health Insurance Guaranty Association?

The Life and Health Insurance Guaranty Association plays a vital role in offering protection to policyholders when an insurance company becomes insolvent. Its primary purpose is to guarantee that policyholders receive their benefits, such as life insurance claims and health insurance coverage, when their insurance provider cannot fulfill its obligations due to financial failure. This protection helps maintain public confidence in the insurance system, ensuring that consumers will not completely lose their benefits and coverage if their insurance company encounters serious financial difficulties.

In contrast, the other options do not accurately reflect the purpose of the Life and Health Insurance Guaranty Association. The organization does not fund insurance companies, regulate premium rates, or approve new insurance products. Instead, it focuses exclusively on safeguarding consumer interests by providing a safety net in case of insurer insolvency, which is essential for maintaining the stability and reliability of the insurance industry as a whole.