State annuity protection

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

Kansas 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 net cash withdrawal values, subject to a $300,000 overall aggregate and statutory exclusions.

Kansas 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
Kansas combines the named life, health, annuity, and structured-settlement categories under a $300,000 ceiling with respect to one life. A qualifying health benefit plan has a $500,000 per-individual exception.
Who provides protection
Kansas Life & Health Insurance Guaranty Association
Article 30 assigns Kansas’s association duties for covered obligations during impairment and after insolvency.
Insurer requirement
Member insurer
The issuer must qualify as a Kansas member insurer, and the policy or contract must fall within Article 30.

How the $250,000 limit works

Kansas generally applies a $250,000 present-value limit to covered annuity benefits with respect to one life, including eligible net cash surrender and net cash withdrawal values, subject to its $300,000 combined ceiling and statutory exclusions.

Ordinary contracts at one failed carrier share the one-life category and $300,000 aggregate.

A second failed member insurer creates a separate statutory obligation.

Kansas combines the named life, health, annuity, and structured-settlement categories under a $300,000 ceiling with respect to one life. A qualifying health benefit plan has a $500,000 per-individual exception.

  • Kansas raises the aggregate ceiling to $500,000 for benefits under a qualifying health benefit plan.
  • 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 the $300,000 aggregate. Benefits transferred in a structured-settlement factoring transaction are excluded.

A $300,000 annuity example

Assume a Kansas resident owns one eligible deferred MYGA with $300,000 in covered present value.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

The Kansas association could protect $250,000 in this example; the receiver would handle the remaining $50,000 as an estate claim.

This illustration applies the ordinary Kansas annuity limits and assumes the claimant and contract qualify.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Kansas can cover an eligible fixed annuity to $250,000 in present value after applying statutory exclusions and the $300,000 aggregate.

  • Fixed indexed annuity (FIA)

    Generally covered

    A fixed indexed annuity is not categorically excluded. Kansas removes index-linked value that remained uncredited or forfeitable at the earlier impairment or insolvency date; for crediting intervals longer than one year, that date is treated as the contractual crediting date and the resulting value is credited and nonforfeitable.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    Kansas applies its fixed-deferred rules to an eligible MYGA, including the $250,000 maximum and statutory interest-crediting restrictions.

  • Variable annuity

    Guaranteed portions may be covered

    Variable market risk remains outside insurer guarantees.

  • Registered index-linked annuity (RILA)

    Contract-specific

    A RILA enters the Kansas calculation only through a contractual carrier guarantee, not through the market-linked loss absorbed by its owner.

  • Unallocated annuity contract

    Limited situations

    Unallocated annuities are generally excluded except for contracts covering individuals in the Kansas governmental section 457 deferred-compensation plan established under K.S.A. 74-49b08 through 74-49b14.

Who may qualify?

  • Kansas residence is determined when a court order finds the member insurer impaired or insolvent.
  • Eligibility depends on the claimant’s role, residence, and contract type; structured-settlement protection follows the payee or a deceased payee’s beneficiary.
  • A nonresident route can apply when the member insurer is domiciled in Kansas, the claimant’s state has a similar association, and that association does not provide coverage because the insurer lacked the required license or certificate of authority there.
  • Kansas coordinates obligations with the claimant’s resident association.
  • The issuer must qualify as a Kansas member insurer, and the policy or contract must fall within Article 30.

What is not covered?

  • Benefits not guaranteed by the member insurer, and risks borne by the policyholder or contract holder, are excluded.
  • Interest, crediting rates, or similar index-linked factors above the statutory Moody’s corporate-bond-yield thresholds are excluded.
  • Index-linked value that remained uncredited or forfeitable at the earlier impairment or insolvency date is excluded, subject to Kansas’s special rule for crediting intervals longer than one year.
  • Claims based on marketing materials, nonapproved side letters or riders, misrepresentation, extra-contractual theories, penalties, or consequential or incidental damages are excluded.
  • Reinsurance is excluded unless assumption certificates were issued.
  • Self-funded or uninsured employer or association arrangements, including specified MEWA, minimum-premium, stop-loss, and administrative-services-only arrangements, are excluded.
  • Dividends, experience-rating credits, voting rights, and service or administration fees or allowances are excluded.
  • Book-value accounting guarantees tied to a plan-owned portfolio are excluded.
  • Medicare Part C or Part D and Medicaid healthcare benefits are excluded.
  • Unallocated annuity contracts are excluded except for the Kansas governmental section 457 plan exception.
  • Policies or contracts issued when the insurer lacked the required Kansas license or certificate of authority are excluded.
  • Benefits preempted from the assessment base by federal or state law are excluded.
  • Structured-settlement benefits transferred in a structured-settlement factoring transaction are excluded.

What happens when an insurer becomes impaired or insolvent?

  1. Determine which coverage rules apply

    The Association applies the liability limits in force when it becomes liable. Matters acted on before July 1, 2024 remain governed by the prior act; actions officially taken on or after that date use the act then in effect.

  2. Determine eligibility

    Residence, claimant role, member-insurer status, and policy or contract type are checked.

  3. Calculate covered benefits

    Kansas identifies covered contractual benefits, applies the $250,000 annuity category amount and $300,000 aggregate, and uses the $500,000 exception for a qualifying health benefit plan.

  4. Coordinate with the receivership

    The Association coordinates covered obligations with the impaired-insurer or insolvent-insurer proceeding; amounts it does not owe remain subject to the receivership estate.

How the guaranty system is financed

Kansas funds covered association obligations through member-insurer assessments allocated by statutory account.

Assessment allocation
Member insurers
Class B assessments are allocated by statutory account using applicable Kansas premiums over the three most recent available calendar years preceding the impairment or insolvency year.
Annual assessment cap
Defined by state law
For each account, Kansas caps a member insurer’s total assessments in one calendar year at 2% of its average applicable Kansas premiums during the three calendar years preceding the year in which the affected insurer became impaired or insolvent.
Premium-tax treatment
State-specific rule
Kansas contribution certificates are carried at 100% in the issuance year, then 80%, 60%, 40%, and 20% over the next four calendar years. The amount written off each year may offset Kansas premium-tax liability, producing an effective 20% annual write-off over five years.
Special medical-malpractice annuity exception
Special Kansas exception: a qualifying annuity funding future economic loss from a medical-malpractice judgment or settlement is not subject to subsection (q)’s ordinary dollar caps; that does not remove other contractual, eligibility, or statutory limits.

What to know before buying

  • Use the ordinary $250,000 annuity limit for retirement planning and confirm contract-specific eligibility before relying on it.
  • K.S.A. 40-3013a prohibits using the association for sales, solicitation, or inducement and requires the commissioner-approved summary document and prescribed disclaimer for covered policies and contracts.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Kansas protection covers eligible annuity obligations through its state guaranty association.
    FDIC: FDIC deposit insurance instead covers eligible balances held at an insured bank.
  • What system stands behind it
    State protection: Kansas member insurers support the Article 30 guaranty association.
    FDIC: Bank assessments maintain the federal fund that responds to insured-depository failures.
  • Coverage-limit basis
    State protection: Kansas caps ordinary covered annuity benefits at $250,000 for each qualifying life.
    FDIC: Federal deposit limits depend on depositor, bank, and ownership category.
  • Whether it applies to annuities
    State protection: A qualifying Kansas annuity may receive protection for its covered insurer obligations.
    FDIC: An annuity contract itself receives no insurance from the FDIC.

Sources and last verified

Last verified: October 5, 2026