An insurer that issued a Tennessee annuity contract becomes insolvent. Under T.C.A. § 56-12-204, the guaranty association's protection for the present value of the annuity's benefits is capped at:

Why A is correct

T.C.A. § 56-12-204(c) caps the guaranty association's obligation for the present value of annuity benefits, including accretions, at $250,000 per individual. Annuity protection is measured on a present-value basis rather than by accumulated account statements, which can make the protected amount differ from the figure on the contract's latest statement. Structured settlement payees share the same $250,000 ceiling, while other product lines carry their own separate caps.

Why the other options are wrong

• B) $100,000 is the life cash surrender and health cap; annuity present value is protected up to a higher figure.
• C) $300,000 is the life death benefit cap and the general aggregate, not the annuity present-value cap.
• D) $500,000 is the special cap for basic hospital, medical, surgical, and major medical coverage on post-2010 insolvencies, not for annuities.

Memory hook

Annuities are shielded to a quarter-million: $250,000 present value.