State RegulationsNC specificDifficulty 2/5
A pension fund that is not a governmental plan holds an unallocated annuity contract, and the issuing insurer fails. Under G.S. 58-62-21(d)(3),(4), the guaranty association's limit for the contract holder is:
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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) and (4), a participant in a governmental retirement plan (such as a 401(k), 403(b), or 457 plan) is protected up to $300,000 in present value, while any other unallocated annuity contract holder is protected up to $5,000,000 regardless of the number of contracts. A non-governmental pension fund falls in the $5,000,000 tier.
Why the other options are wrong
- A) $300,000 is the governmental-plan participant limit under G.S. 58-62-21(d)(3), which does not apply to this non-governmental fund.
- C) The $1,000,000 figure belongs to structured settlements under G.S. 58-62-21(d)(5), and the unallocated limit is not measured per contract.
- D) There is no first-contract tier; the $500,000 figure is the health-benefit-plan cap.
Memory hook
Government $300k, everyone else $5M.