State RegulationsNC specificDifficulty 2/5
Under North Carolina guaranty association law, unallocated annuity contracts are protected as follows:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-62-21(d)(3),(4), participants in governmental retirement plans (such as defined benefit plans or 401/403(b)/457 arrangements) are protected up to $300,000 in present value of annuity benefits for unallocated annuities, while any other unallocated annuity contract holder is protected up to $5,000,000 regardless of the number of contracts. The distinction reflects the different nature of governmental plan funding.
Why the other options are wrong
- A is wrong because the limit for other unallocated annuity contract holders is $5,000,000; $1,000,000 is the structured settlement limit.
- C is wrong because $500,000 is the health benefit plan limit, not the governmental plan participant limit for unallocated annuities.
- D is wrong because the two figures are reversed; governmental plan participants get $300,000 and other contract holders get $5,000,000.
Memory hook
Unallocated annuities: government plans $300k, everyone else $5M.