State annuity protection

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

Maine 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.

Maine 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
Benefits within Maine’s ordinary per-life categories under § 4603(3)(B) are generally subject to a $300,000 aggregate with respect to one life. Qualifying health-plan benefits may instead be subject to a $500,000 aggregate. The $300,000 aggregate does not increase Maine’s separate $250,000 ordinary annuity limit.
Who provides protection
Maine Life and Health Insurance Guaranty Association
The Maine Life and Health Insurance Guaranty Association is a nonprofit legal entity created by statute and may provide protection for covered obligations of impaired or insolvent member insurers.
Insurer requirement
Member insurer
The issuing insurer must qualify as a member insurer under Maine law, and the policy or contract must otherwise be covered under Chapter 62.

How the $250,000 limit works

Maine’s $250,000 annuity limit includes eligible net cash surrender and net cash withdrawal values.

Ownership note: Maine’s statute states the ordinary annuity limit with respect to one life, while the Association FAQ illustrates annuity protection as $250,000 per owner per member company. Unusual owner, annuitant, or joint-ownership arrangements may require case-specific review.

Multiple annuity policies or contracts with respect to the same life at the same impaired or insolvent member insurer share Maine’s $250,000 ordinary annuity limit.

Coverage limits are generally applied separately to each impaired or insolvent member insurer. Residency is determined on the date of the first court order determining the member insurer to be impaired or insolvent.

Benefits within Maine’s ordinary per-life categories under § 4603(3)(B) are generally subject to a $300,000 aggregate with respect to one life. Qualifying health-plan benefits may instead be subject to a $500,000 aggregate. The $300,000 aggregate does not increase Maine’s separate $250,000 ordinary annuity limit.

  • A qualifying structured-settlement payee, or the beneficiary or beneficiaries of a deceased payee, may receive up to $250,000 in aggregate present-value annuity benefits, including eligible net cash surrender and withdrawal values.
  • An eligible participant in a governmental retirement benefit plan established under IRC sections 401, 403(b), or 457 may receive up to $250,000 in aggregate present-value annuity benefits under all qualifying annuities issued by the same member insurer.

A $300,000 annuity example

Assume an individual 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 illustration applies Maine’s ordinary annuity limit and does not estimate the timing or amount of any additional receivership recovery.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Fixed annuities are generally covered up to Maine’s $250,000 present-value annuity limit with respect to one life, 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, Maine calculates the value as though the earlier impairment or insolvency date were the contractual crediting date and treats the resulting amount as credited and nonforfeitable.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    MYGAs are generally treated as fixed deferred annuities and are subject to Maine’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

    Limited situations

    Unallocated annuity contracts are generally excluded, except for annuities issued to qualifying governmental retirement plans under IRC sections 401, 403(b), or 457. In addition, a benefit specifically guaranteed to an individual is not treated as unallocated to that extent.

Who may qualify?

  • Residency is determined on the date of entry of the first court order determining the member insurer to be impaired or insolvent.
  • Eligibility generally depends on the person to whom the contractual obligation is owed, that person’s Maine residency under § 4605-A, and the ownership or certificate-holder terms of the policy or contract.
  • A nonresident may qualify in limited circumstances when the issuing insurer is Maine-domiciled, never held the required license or certificate of authority in the person’s state of residence, that state has a similar guaranty association, and the person is not eligible for coverage there.
  • Maine’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 Maine law, and the policy or contract must otherwise be covered under Chapter 62.

What is not covered?

  • Nonguaranteed portions and owner-borne investment risk are generally excluded. Certain uncredited or forfeitable index-linked amounts are also excluded, subject to Maine’s special rule for crediting less frequently than annually.
  • Reinsurance contracts are excluded unless assumption certificates were issued.
  • Policies or contracts issued by assessment mutuals and nonprofit hospital or medical service plans are excluded.
  • Interest, crediting rates, or similar factors above Maine’s statutory limits based on Moody’s Corporate Bond Yield Average may be excluded from guaranty protection.
  • Self-funded or uninsured employer and association plans are excluded.
  • Dividends, experience-rating credits, voting rights, fees, and allowances paid in connection with policy or contract administration are excluded.
  • A policy or contract issued in Maine while the member insurer lacked the required license or certificate of authority is excluded.
  • Claims based on marketing materials, unauthorized side letters or riders, or misrepresentations regarding policy or contract benefits are generally excluded. Extra-contractual claims, including bad faith, punitive or exemplary damages, attorneys’ fees and costs, as well as penalties and consequential or incidental damages, are also generally excluded.
  • Book-value accounting guarantees for defined-contribution plan assets owned by a plan or nonaffiliated trustee are excluded.
  • Unallocated annuity contracts are generally excluded, except for qualifying governmental retirement plans under IRC sections 401, 403(b), or 457; an annuity benefit specifically guaranteed to an individual is not treated as unallocated to that extent.
  • Benefits or services under Medicare Part C, Medicare Part D, or Medicaid are excluded.

What happens when an insurer becomes impaired or insolvent?

  1. The relevant court order determines the residency date

    Residency is determined on the date of the first court order determining the member insurer to be impaired or insolvent.

  2. Claimant, insurer, and contract eligibility are reviewed

    The Association determines whether the claimant, issuing insurer, and contract satisfy Maine’s residency, ownership, member-insurer, coverage, and exclusion rules before applying the relevant benefit limits.

  3. Covered obligations may be continued, transferred, or paid

    Depending on the circumstances, the Association may guarantee, assume, reissue, reinsure, continue, or assure payment of covered contractual obligations, subject to Chapter 62 and the receivership process.

  4. Amounts above guaranty protection may remain in receivership

    Amounts above the Association’s protection may remain claims against the insurer’s receivership estate, with any additional recovery depending on available estate assets and the receivership process.

How the guaranty system is financed

Class A assessments fund administrative and general expenses, while Class B assessments fund the Association’s duties relating to impaired or insolvent member insurers.

Assessment allocation
Member insurers
Class A assessments may be allocated on a pro rata or non-pro rata basis. Class B assessments are allocated among member insurers using each insurer’s share of covered Maine premiums for the most recent calendar year for which information is available preceding the year of impairment or insolvency.
Annual assessment cap
Defined by state law
Annual assessment cap — 2%. Total assessments against a member insurer for each account in one calendar year may not exceed 2% of that insurer’s Maine premiums on policies covered by the account.
Premium-tax treatment
State-specific rule
Premium-tax treatment — 20% per year for five years. A member insurer may offset 20% of a qualifying Class B assessment against Maine premium-tax liability in each of the five calendar years following the payment year. An insurer not subject to premium tax may use the credit against Maine income tax; an insurer exempt from both may recoup assessments through a Superintendent-approved premium surcharge.
Assessment funding and receivership recoveries
Assessment funding does not change consumer coverage limits. The Association’s statutory payments and any separate receivership recoveries are governed by different provisions and may interact during the resolution of an impaired or insolvent insurer.

What to know before buying

  • Maine’s $250,000 ordinary annuity limit is subject to the $300,000 aggregate applicable to benefits under § 4603(3)(B). The separate structured-settlement and governmental-plan participant limits are stated in paragraphs C and D.
  • Maine prohibits using the existence of the Guaranty Association for sales, solicitation, or inducement to purchase covered insurance. Unlike many model-law states, current Chapter 62 does not itself contain a separate guaranty-summary delivery requirement.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Maine guaranty protection may apply to eligible insurer-guaranteed contractual annuity benefits that satisfy Chapter 62.
    FDIC: FDIC coverage concerns money placed in a qualifying deposit account.
  • What system stands behind it
    State protection: The Maine Life and Health Insurance Guaranty Association is a nonprofit legal entity created by statute and may provide protection for covered obligations of impaired or insolvent member insurers.
    FDIC: Federally insured banks participate in the deposit-insurance system administered by the FDIC.
  • Coverage-limit basis
    State protection: Maine generally applies a $250,000 ordinary annuity limit with respect to one life and a $300,000 aggregate across the benefit categories specified in § 4603(3)(B), subject to the $500,000 health-plan exception.
    FDIC: The federal limit is organized by depositor capacity, account ownership, and bank.
  • Whether it applies to annuities
    State protection: Eligible annuity benefits may receive Maine guaranty association protection, but annuity contracts are not bank deposits and are not insured by the FDIC.
    FDIC: The federal program can insure an eligible bank deposit, not the Maine annuity.

Sources and last verified

Last verified: October 6, 2026