State RegulationsGA specificDifficulty 2/5
One owner holds multiple nongroup life insurance policies and unallocated annuity contracts with an insolvent insurer. Under the Georgia guaranty association law, the association's aggregate obligation for that owner is:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under O.C.G.A. § 33-38-7(a)(12)(D)(ii) and (E), where one owner holds multiple nongroup life policies and unallocated annuity contracts with the insolvent insurer, the association's aggregate obligation is capped at $5 million regardless of the number of policies. The cap exists to prevent an owner from multiplying protection by fragmenting wealth across many contracts with a single impaired carrier.
Why the other options are wrong
- A) The $300,000 figure is the per-life aggregate under the general caps; the special multi-policy owner rule fixes a single $5 million ceiling, not a per-policy entitlement.
- C) $500,000 is the health benefit plan figure; it is not the multi-policy owner cap.
- D) The $5 million limit operates in the aggregate for the owner; it does not multiply policy by policy.
Memory hook
Many policies, one lid: the multi-policy owner tops out at $5 million total.