An annuity owner in Atlanta, Georgia holds a contract with an insolvent insurer. The present value of the annuity's benefits is $400,000 and its net cash surrender value is $300,000. Which maximums apply to the Guaranty Association's obligation on this annuity?

Why B is correct

Under O.C.G.A. § 33-38-7(a)(12)(B)(iii), the Guaranty Association covers the present value of annuity benefits up to $300,000, and net cash surrender or withdrawal values up to no more than $250,000. Both of the owner's figures exceed the caps, so the association's obligation is limited to $300,000 on benefits and $250,000 on surrender value.

Why the other options are wrong

• A) These are simply the contract's own values; O.C.G.A. § 33-38-7(a)(12)(B)(iii) caps the association's obligation at $300,000 for benefits and $250,000 for surrender value.
• C) $500,000 is the health benefit plan cap under O.C.G.A. § 33-38-7(a)(12)(B)(ii), not the annuity present-value cap, which is $300,000 under (B)(iii).
• D) The annuity cash surrender value is capped at no more than $250,000 under O.C.G.A. § 33-38-7(a)(12)(B)(iii), not at the $300,000 benefit figure.

Memory hook

Annuities in Georgia: three hundred on the income promise, two-fifty on the cash-out.