A custodian holds an unallocated annuity contract funding a private, non-governmental retirement arrangement, and the issuing member insurer becomes insolvent. Under North Carolina law, the maximum Guaranty Association protection for the contract holder is:

Why D is correct

Under G.S. 58-62-21(d)(3) and (4), a participant in a governmental plan is protected up to $300,000 in present value annuity benefits, while any other unallocated annuity contract holder is protected up to $5,000,000, regardless of the number of contracts held. The $1,000,000 figure applies to structured settlements per payee under G.S. 58-62-21(d)(5), and unallocated annuities are covered by the Association — they are not excluded from the Act.

Why the other options are wrong

• A: $300,000 is the cap for governmental plan participants under G.S. 58-62-21(d)(3); a non-governmental contract holder gets the higher $5,000,000 limit under (d)(4).
• B: $1,000,000 per payee is the structured settlement limit under G.S. 58-62-21(d)(5), a different benefit category from unallocated annuity contracts.
• C: Unallocated annuities are covered by the Association up to $5,000,000 for non-governmental contract holders (G.S. 58-62-21(d)(4)); they are not excluded from protection.

Memory hook

Gov plan $300k, everyone else unallocated $5M.