Runs on insurance firms are more likely to occur than runs on banks even in states with guaranty funds for insurers because these funds generally

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Guaranty funds for insurers are typically state-run and lack a permanent reserve fund, meaning they rely on assessments from member insurers to pay off claims. This can result in delays in repayment to insurance policyholders. Additionally, they do not have federal government backing, making them more vulnerable to economic downturns and increasing the likelihood of runs on insurance firms.

Runs on Insurance Firms Are More Likely to Occur Than