The Illinois Guaranty Fund provides a mechanism for the payment of claims of insolvent carriers EXCEPT for?

The Illinois Guaranty Fund is designed to protect policyholders by ensuring that claims are paid even in the event of an insurer's insolvency. However, it does have specific limitations regarding the types of insurance providers covered under this protection.

Surplus lines companies are not included in the Illinois Guaranty Fund's coverage because they write insurance coverage that may not be available from licensed companies in the state. This typically involves specialized or higher-risk policies that are tailored to unique situations. As a result, these companies operate under a different regulatory framework, and policyholders must understand that they do not have the protections offered by the Guaranty Fund that other standard insurance providers might.

On the other hand, small mutual insurance companies, foreign insurance companies, and local township insurance providers are generally covered by the guaranty fund, reflecting the fund's purpose of protecting policyholders who have purchased insurance from more traditional and regulated companies. As such, policyholders of these entities would benefit from the Guaranty Fund in the event of insolvency.