State RegulationsMA specificDifficulty 2/5
A structured settlement annuity promises an injured claimant periodic payments, and the issuing insurer becomes insolvent. Under M.G.L. c. 175, § 146B(3)(c), what dollar ceiling applies to the guaranty protection measured as present value?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.G.L. c. 175, § 146B(3)(c) caps the Massachusetts Life and Health Insurance Guaranty Association's protection for a structured settlement annuity at $250,000 in present value per payee. The ceiling is measured by the present value of the promised periodic payments, not by summing their face amounts over time. This per-payee limit sits alongside the separate caps the statute assigns to other product lines.
Why the other options are wrong
- B) $300,000 is the figure attached to life insurance death benefits, disability income, long-term care, and the ordinary per-life aggregate under M.G.L. c. 175, § 146B — not the structured settlement limit.
- C) $500,000 is the guaranty tier for basic hospital, basic medical-surgical, and major medical benefits, not for structured settlement annuities.
- D) The statute does impose a ceiling; § 146B(3)(c) fixes it at $250,000 in present value per payee.
Memory hook
Structured settlement, single payee: a quarter-million present value is the guaranty ceiling.