State RegulationsGA specificDifficulty 2/5
For an insolvent insurer's covered annuity contracts, the Georgia guaranty association covers the present value of benefits up to $300,000, but its obligation for net cash surrender and net cash withdrawal values is capped at:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under O.C.G.A. § 33-38-7(a)(12)(B)(iii), the guaranty association's obligation for annuities is the present value of promised benefits up to $300,000, but the cap on net cash surrender and net cash withdrawal values is $250,000. An owner who surrenders the contract therefore recovers at most the lower figure, while a continuing annuitant's benefit stream is protected up to the higher present-value ceiling.
Why the other options are wrong
- B) $100,000 is the life insurance cash surrender cap, not the annuity figure.
- C) $300,000 is the present-value-of-benefits ceiling for annuities; the surrender and withdrawal cap is lower.
- D) $500,000 is the health benefit plan cap and does not apply to annuity surrender values.
Memory hook
Annuity: 300K if you stay, 250K if you walk — surrendering costs you the top slice.