State annuity protection

Hawaii Annuity Guaranty Protection: $250,000 Annuity Limit Explained

Hawaii generally provides up to $250,000 in protection for the present value of covered annuity benefits with respect to one life, including eligible net cash surrender and withdrawal values, subject to eligibility requirements and statutory exclusions.

Hawaii annuity protection at a glance

Annuity benefit limit
$250,000
Present value of covered annuity benefits, including eligible net cash surrender and net cash withdrawal values
Overall benefit cap
$300,000
The ordinary annuity limit is also subject to Hawaii’s $300,000 aggregate with respect to one life. Qualifying major-medical benefits can instead be subject to a higher $500,000 aggregate.
Who provides protection
Hawaii Life & Disability Insurance Guaranty Association
The Hawaii Life and Disability Insurance Guaranty Association provides statutory protection for covered obligations of impaired or insolvent member insurers and coordinates with the Insurance Commissioner and receivership court as necessary.
Insurer requirement
Member insurer
The issuing insurer must qualify as a member insurer under Hawaii law, and the policy or contract must otherwise be covered under the Hawaii Life and Disability Insurance Guaranty Association Act.

How the $250,000 limit works

Hawaii generally limits covered annuity benefits to $250,000 in present value with respect to one life, including eligible net cash surrender and withdrawal values.

Ownership note: Hawaii’s statute states the ordinary $250,000 annuity limit with respect to one life, while HLDIGA’s FAQ illustrates multiple-annuity coverage as $250,000 per owner per member company. The statutory per-life rule is the primary rule; unusual owner, annuitant, or joint-ownership arrangements may require case-specific review.

The $250,000 statutory annuity limit applies with respect to one life regardless of the number of policies or contracts with the same impaired or insolvent member insurer.

Coverage limits are generally applied separately to each impaired or insolvent member insurer, subject to Hawaii’s eligibility and interstate coordination rules.

The ordinary annuity limit is also subject to Hawaii’s $300,000 aggregate with respect to one life. Qualifying major-medical benefits can instead be subject to a higher $500,000 aggregate.

  • A qualifying structured-settlement payee, or the beneficiary or beneficiaries of a deceased payee, may receive up to $250,000 in present-value annuity benefits, subject to Hawaii’s eligibility and $300,000 aggregate rules.

A $300,000 annuity example

Assume a Hawaii resident owns an eligible fixed annuity with a covered present value of $300,000 at one impaired or insolvent member insurer.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

In this example, up to $250,000 may qualify for guaranty association protection, while the remaining $50,000 may remain a claim against the insurer’s receivership estate.

This example uses Hawaii’s current statutory limit and does not estimate the timing or amount of any additional recovery from the insurer’s receivership estate.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Fixed annuities are generally covered up to Hawaii’s $250,000 present-value annuity limit, subject to eligibility requirements and statutory exclusions.

  • Fixed indexed annuity (FIA)

    Generally covered

    FIAs are generally covered to the extent of qualifying insurer-guaranteed benefits. Certain excess, uncredited, or forfeitable index-linked amounts may be excluded; however, when value is credited less frequently than annually, Hawaii determines the value as though the impairment or insolvency date were the contractual crediting date.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    MYGAs are generally treated as fixed deferred annuities and are subject to Hawaii’s $250,000 annuity limit and statutory interest-rate restrictions.

  • Variable annuity

    Guaranteed portions may be covered

    Only qualifying insurer-guaranteed benefits may receive protection; investment gains or losses borne by the contract owner through a separate account are generally excluded.

  • Registered index-linked annuity (RILA)

    Contract-specific

    For a RILA, qualifying insurer-guaranteed obligations may be covered, while portions where the contract owner bears market or index risk are generally excluded.

  • Unallocated annuity contract

    Generally excluded

    Unallocated annuity contracts are generally excluded, except to the extent specific annuity benefits are guaranteed to an individual under the contract or certificate.

Who may qualify?

  • Residency is determined on the date a court enters an order determining the member insurer to be impaired or insolvent.
  • For ordinary annuities, eligibility generally follows the qualifying legal owner or certificate holder. Structured-settlement annuities use separate payee and beneficiary rules.
  • A nonresident may qualify in limited circumstances when the issuing insurer is Hawaii-domiciled, the person’s state of residence has a similar guaranty association, and the person is not eligible for coverage from that association because of the insurer’s licensing status there.
  • Hawaii’s interstate coordination rules are designed to provide protection through only one state guaranty association and prevent duplicate guaranty coverage for the same obligation.
  • The issuing insurer must qualify as a member insurer under Hawaii law, and the policy or contract must otherwise be covered under the Hawaii Life and Disability Insurance Guaranty Association Act.

What is not covered?

  • Portions of a policy or contract that are not guaranteed by the member insurer, or where the policy or contract owner bears the investment risk, are generally excluded.
  • Interest, crediting rates, or similar factors above Hawaii’s statutory limits based on Moody’s Corporate Bond Yield Average may be excluded.
  • Certain uncredited or forfeitable index-linked amounts are generally excluded. If value is credited less frequently than annually, Hawaii instead calculates it as though the impairment or insolvency date were the contractual crediting date and treats the result as credited and nonforfeitable.
  • Claims based on marketing materials, unauthorized side letters or riders, misrepresentations, extra-contractual claims, penalties, and consequential or incidental damages are generally excluded.
  • Reinsurance obligations are generally excluded unless an assumption certificate has been issued.
  • Self-funded or uninsured employer benefit arrangements are generally excluded.
  • Dividends, experience-rating credits, voting rights, administrative fees, certain book-value accounting guarantees, and Medicare Part C or Part D benefits are generally excluded.
  • Unallocated annuity contracts and policies or contracts issued in Hawaii when the member insurer lacked authority to issue them are generally excluded, subject to the individual-guarantee exception for unallocated benefits.

What happens when an insurer becomes impaired or insolvent?

  1. Determine the insurer’s impairment or insolvency status

    A court order of rehabilitation or conservation establishes an impaired insurer, while a liquidation order with a finding of insolvency establishes an insolvent insurer. For an impaired insurer, HLDIGA may take specified actions in its discretion; for an insolvent insurer, the statute requires protection through an authorized method.

  2. Determine claimant, insurer, and contract eligibility

    The Association determines whether the claimant, issuing insurer, and policy or contract satisfy Hawaii’s residency, ownership, member-insurer, licensing, coverage, and interstate coordination requirements.

  3. Determine covered contractual benefits

    The Association determines the covered contractual obligation after applying statutory exclusions and then applies the $250,000 annuity-specific limit and any applicable aggregate limit.

  4. Coordinate guaranty protection with the receivership

    Depending on the circumstances, covered policies or contracts may be guaranteed, assumed, reissued, reinsured, continued, or paid. Amounts above guaranty protection may remain claims against the insurer’s receivership estate.

How the guaranty system is financed

The Association is funded primarily through assessments of member insurers when funds are needed to carry out its statutory obligations.

Assessment allocation
Member insurers
Class B assessments are allocated among Hawaii’s statutory accounts and among member insurers based generally on covered Hawaii premiums under the assessment formulas in HRS §431:16-209.
Annual assessment cap
Defined by state law
Annual assessment cap — 2%. For each account, total annual assessments generally cannot exceed 2% of the member insurer’s average annual Hawaii premiums on covered policies and contracts during the three calendar years preceding the year in which the affected insurer became impaired or insolvent.
Premium-tax treatment
State-specific rule
Premium-tax treatment — 20% per year for five years. A member insurer may offset 20% of a qualifying non-Class-A assessment against Hawaii premium-tax liability in each of the five calendar years following the year in which the assessment was paid.
Hawaii member assessments
Hawaii’s still-posted September 1991 administrative-rule notice is outdated: it states the former $100,000 annuity limit. Act 250 (2012), effective July 1, 2012, increased the statutory annuity limit to $250,000 for applicable proceedings, and the current statute and HLDIGA FAQ reflect $250,000.

What to know before buying

  • Hawaii’s $250,000 figure is a statutory maximum; actual protection depends on claimant eligibility, member-insurer status, contract terms, and statutory exclusions.
  • Hawaii prohibits using the existence of the Guaranty Association for sales, solicitation, or inducement to purchase covered insurance. Insurers must also deliver the approved guaranty-association summary document with covered policies or contracts as required by HRS §431:16-218.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Hawaii guaranty protection may apply to eligible contractual annuity obligations of impaired or insolvent member insurers.
    FDIC: FDIC insurance covers an eligible deposit balance under federal banking law.
  • What system stands behind it
    State protection: HLDIGA is a statutory guaranty association funded through assessments of member insurers; it is not the FDIC and does not provide federal deposit insurance.
    FDIC: The federal government stands behind FDIC insurance on eligible bank balances with its full faith and credit.
  • Coverage-limit basis
    State protection: Hawaii generally provides up to $250,000 in present-value annuity benefits with respect to one life at an impaired or insolvent member insurer, subject to the applicable aggregate and statutory exclusions.
    FDIC: Federal coverage measures balances by depositor, bank, and ownership category.
  • Whether it applies to annuities
    State protection: Eligible annuity benefits may receive Hawaii guaranty association protection, but annuity contracts are not bank deposits and are not insured by the FDIC.
    FDIC: The FDIC does not insure annuity contracts or their insurance guarantees.

Sources and last verified

Last verified: October 5, 2026