State RegulationsNC specificDifficulty 3/5
What is the maximum guaranty association protection for the holder of an unallocated annuity contract that does not fund a governmental plan?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under G.S. 58-62-21(d)(4), the contract holder of any other unallocated annuity is protected up to $5,000,000 in present value benefits, regardless of the number of contracts. By contrast, participants in governmental plan unallocated annuities are limited to $300,000 under G.S. 58-62-21(d)(3), so the source of the contract decides the tier.
Why the other options are wrong
- A) The $300,000 figure is the limit for governmental-plan participants under G.S. 58-62-21(d)(3), not for other unallocated annuity contract holders.
- B) The $500,000 cap is the health benefit plan limit under G.S. 58-62-21(d)(2a) and does not apply to unallocated annuities.
- D) The $1,000,000 limit is reserved for structured settlement benefits under G.S. 58-62-21(d)(5).
Memory hook
Non-governmental unallocated annuity: five million flat, contracts combined.