State annuity protection

Alaska Annuity Guaranty Protection: $250,000 Limit Explained

Alaska generally provides up to $250,000 in protection for the present value of covered annuity benefits, subject to eligibility requirements and statutory exclusions.

Alaska annuity protection at a glance

Annuity benefit limit
$250,000
Present value of qualifying annuity benefits after Alaska’s statutory valuation rules
Overall benefit cap
$300,000
Without a health-benefit-plan claim, one Alaskan’s combined ceiling is $300,000. Such a health claim raises that ceiling to $500,000.
Who provides protection
Alaska Life and Health Insurance Guaranty Association
AS 21.79 assigns the Alaska association its duties once the required impairment or insolvency event occurs.
Insurer requirement
Member insurer
Alaska coverage reaches only a contract from a company included in AS 21.79’s member-insurer definition.

How the $250,000 limit works

Cash surrender and withdrawal values are included within the $250,000 amount for one life; most benefits share a $300,000 aggregate unless a health benefit plan raises the aggregate to $500,000.

Alaska’s statute measures the ordinary $250,000 annuity ceiling by one covered life. Because the association’s examples use owner-and-carrier terminology, unusual ownership structures need individual confirmation.

A separate carrier failure is administered on its own, subject to the eligibility rules applicable when that insurer is impaired or insolvent.

Without a health-benefit-plan claim, one Alaskan’s combined ceiling is $300,000. Such a health claim raises that ceiling to $500,000.

  • For an unallocated annuity funding an eligible governmental retirement plan, Alaska caps each participant’s present-value benefits at $250,000.
  • Alaska caps certain remaining covered unallocated arrangements at $5 million for each eligible owner or sponsoring plan.
  • Alaska gives an eligible structured-settlement payee a $250,000 present-value annuity ceiling.

A $300,000 annuity example

Take an Alaskan with one $300,000 fixed contract, no health-plan claim, and undisputed residence on the order date.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

The annuity calculation reaches $250,000; the extra $50,000 is left to the receivership despite unused room under the ordinary aggregate.

The example assumes ordinary resident eligibility and does not rely on Alaska’s currently dormant insurer-domicile fallback.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    A conventional fixed annuity can enter the $250,000 present-value calculation.

  • Fixed indexed annuity (FIA)

    Generally covered

    Index-linked value can be left out while it remains uncredited or forfeitable; Alaska uses a separate calculation when a contract credits less often than yearly.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    For a MYGA, Alaska treats the guaranteed deferred value as fixed-annuity value, then applies the $250,000 ceiling and statutory interest restrictions.

  • Variable annuity

    Guaranteed portions may be covered

    Variable-contract protection reaches insurer-guaranteed obligations, not assets whose investment risk belongs to the owner.

  • Registered index-linked annuity (RILA)

    Contract-specific

    A RILA must be separated into guaranteed insurer promises and market-linked value before limits are applied.

  • Unallocated annuity contract

    Limited situations

    An eligible governmental-plan participant funded through an unallocated contract has a $250,000 individual ceiling. For some other covered unallocated arrangements, Alaska caps the owner or sponsor at $5 million.

Who may qualify?

  • Alaska fixes residence at the impairment or insolvency order.
  • The contract owner generally controls; annuity certificates and structured-settlement interests can shift the analysis to the named beneficiary or payee.
  • For a nonresident, Alaska can respond only when the failed carrier is Alaska-domiciled and the claimant’s comparable home-state association denies coverage because the issuer lacked the required license there.
  • This is an edge-case fallback. The Division’s current report identifies no Alaska-domiciled life, annuity, or health insurer to which it presently attaches.
  • Alaska coverage reaches only a contract from a company included in AS 21.79’s member-insurer definition.

What is not covered?

  • Nonguaranteed portions of a contract are not association obligations.
  • Crediting above Alaska’s defined published-monthly-average test is excluded.
  • Index-linked value can be left out while it remains uncredited or forfeitable. If the contract credits less often than yearly, Alaska calculates accrued value as though the failure date were the contract’s crediting date.
  • Contracts issued by entities outside the member-insurer definition do not qualify.

What happens after an insurer fails?

  1. 1

    Identify the statutory event

    The order date fixes residence and starts the coverage analysis.

  2. 2

    Route the claimant

    The association checks Alaska residence first and the narrow insurer-domicile fallback second.

  3. 3

    Value the obligation

    The association applies Alaska’s guarantee, interest, and index-crediting rules before the annuity and aggregate limits.

  4. 4

    Coordinate the estate

    The receiver and association arrange covered continuation, transfer, or payment while excess value stays with the estate.

How the guaranty system is financed

Alaska is primarily assessment-funded rather than built around a fixed prefunded claims reserve. The association may still retain reasonable amounts for continuing expenses and future loss claims.

Assessment allocation
Member insurers
Member insurers are assessed through statutory accounts based on relevant Alaska premium activity.
Annual assessment cap
Defined by state law
Alaska caps an annual member-insurer assessment at 2% of the insurer’s average annual Alaska premiums for the relevant account.
Premium-tax treatment
State-specific rule
No member-insurer premium-tax offset was identified in AS 21.79. Section 21.79.130 instead exempts the association itself from state and local fees and taxes.
How member assessments work
Member insurers fund administration and covered impairment or insolvency obligations through the assessment system in AS 21.79.

What to know before buying

  • Size exposure by the $250,000 annuity line and revisit jurisdiction if you move while the issuer is already in regulatory trouble.
  • Alaska bars sellers from using association protection as an inducement. Its required notice also tells purchasers that the backstop should not drive their insurer choice.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Alaska covers eligible contractual annuity benefits after its insurance-law trigger.
    FDIC: FDIC coverage instead protects qualifying money deposited at an insured bank.
  • What system stands behind it
    State protection: Alaska’s guaranty association is an industry-funded nonprofit legal entity supported by member-insurer assessments.
    FDIC: FDIC insurance is federal deposit insurance funded through assessments on insured banks.
  • Coverage-limit basis
    State protection: One life at an Alaska member insurer receives a $250,000 annuity ceiling.
    FDIC: Depositor identity, bank identity, and federal ownership category set the deposit limit.
  • Whether it applies to annuities
    State protection: A qualifying Alaska annuity may receive protection under AS 21.79.
    FDIC: FDIC insurance never applies merely because an asset is called an annuity.

Sources and last verified

Last verified: August 29, 2026