State annuity protection

Maine Annuity Guaranty Protection: $250,000 Limit Explained

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

Maine annuity protection at a glance

Annuity benefit limit
$250,000
Present value of eligible annuity benefits, with covered net surrender and withdrawal values included.
Overall benefit cap
$300,000
Covered benefits are generally subject to a $300,000 aggregate limit with respect to one life, although qualifying health-plan benefits are subject to a higher limit.
Who provides protection
Maine Life & Health Insurance Guaranty Association
The Maine Life & Health Insurance Guaranty Association provides statutory protection for covered obligations of failed member insurers.
Insurer requirement
Member insurer
Ordinary coverage requires an insurer within Maine’s member-insurer framework.

How the $250,000 limit works

The $250,000 annuity limit includes eligible net cash surrender and withdrawal values.

Ownership note: Maine applies its ordinary annuity ceiling with respect to one life. For joint owners or contracts naming different owners and annuitants, do not assume a second limit; individual analysis is required.

Several annuities covering one life at one failed company do not multiply the $250,000 maximum.

Coverage is analyzed separately for each failed member insurer, with Maine residence fixed at the first qualifying impairment or insolvency court order.

Covered benefits are generally subject to a $300,000 aggregate limit with respect to one life, although qualifying health-plan benefits are subject to a higher limit.

  • Each structured-settlement payee, or the payee’s beneficiaries if the payee is deceased, may receive up to $250,000 in aggregate present-value annuity benefits.
  • For a Maine governmental retirement plan in federal tax-code categories 401, 403(b), or 457, each eligible participant has $250,000 in present-value annuity protection aggregated across one member carrier.

A $300,000 annuity example

Assume an individual owns a single eligible fixed annuity worth $300,000 with the failed insurer.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

The product line supplies the full association amount available in this single-policy example.

The illustration applies the ordinary annuity ceiling and does not estimate receivership distributions.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Fixed annuities are generally covered up to Maine’s applicable $250,000 present-value limit, subject to statutory exclusions.

  • Fixed indexed annuity (FIA)

    Generally covered

    For a Maine FIA, some nonguaranteed, excess, unposted, or forfeitable index value can be excluded. Contracts crediting less frequently than annually use the impairment or insolvency date as the contract crediting date, making the resulting accrued amount nonforfeitable.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

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

  • Variable annuity

    Guaranteed portions may be covered

    Variable-annuity investment risk borne by the owner is not converted into a guaranty claim.

  • Registered index-linked annuity (RILA)

    Contract-specific

    Only obligations guaranteed by the insurer may qualify; portions where the contract owner bears the investment or market risk are generally excluded.

  • Unallocated annuity contract

    Limited situations

    Maine generally excludes unallocated contracts but preserves a route for governmental plans in federal tax-code categories 401, 403(b), or 457. Each eligible participant can receive $250,000 in present value across the relevant annuities at one member carrier.

Who may qualify?

  • Maine fixes residence at the earlier court order determining impairment or insolvency.
  • The person owed the contractual obligation is tested under Maine’s resident definition and the contract’s ownership terms.
  • The failed carrier must be domiciled in Maine and must have never held a license in the claimant’s home state. That state must have a similar guaranty association, but the person is not eligible there.
  • Maine may act for a qualifying nonresident only when the failed insurer’s Maine domicile and licensing facts satisfy the statutory exception.
  • Ordinary coverage requires an insurer within Maine’s member-insurer framework.

What is not covered?

  • Nonguaranteed portions, owner-borne investment or market risk, and uncredited or forfeitable index-linked value are generally excluded, subject to the special rule for crediting less frequently than annually.
  • Interest or index-linked value above Maine’s Moody’s-based statutory benchmarks is excluded.
  • Unallocated annuities are outside the act except for specifically identified governmental retirement plans.
  • Claims based on marketing materials, certain unapproved side agreements, or misrepresentations of policy or contract benefits are excluded.
  • Extra-contractual claims and claims for penalties or consequential or incidental damages are excluded.

What happens after an insurer fails?

  1. 1

    Court order fixes residence

    The first qualifying impairment or insolvency order determines who is a Maine resident for the claim.

  2. 2

    Contract review

    The association tests membership, ownership, product guarantees, and exclusions before applying a dollar amount.

  3. 3

    Covered obligation handled

    Eligible benefits may be continued or transferred under the association’s statutory powers and the receiver’s plan.

  4. 4

    Excess follows the estate

    Any contractual value not met by the association remains dependent on liquidation recoveries.

How the guaranty system is financed

Maine funds the association through Class A assessments for administrative and general expenses and Class B assessments for duties involving an impaired or insolvent insurer.

Assessment allocation
Member insurers
For Maine, Class A assessments may be pro rata or non-pro rata. Class B allocations use each carrier’s share of covered Maine premiums in the statutory base year.
Annual assessment cap
Defined by state law
Maine caps total assessments against a member insurer for each account in a calendar year at 2% of the insurer’s Maine premiums on policies covered by that account.
Premium-tax treatment
State-specific rule
A member insurer may offset a qualifying Maine Class B assessment against premium-tax liability at 20% annually for five calendar years after payment. Section 4621 provides income-tax or approved premium-surcharge alternatives for insurers not subject to premium tax.
Member assessment mechanism
Assessment authority supports statutory obligations, while receivership assets and recoveries remain part of the ultimate funding picture.

What to know before buying

  • The $250,000 annuity-specific limit should be considered together with Maine’s separate $300,000 aggregate when understanding potential guaranty protection.
  • Maine prohibits using association protection to solicit insurance. Chapter 62 contains no model-style duty to deliver a guaranty summary with the policy.

How state protection differs from FDIC insurance

  • What it covers
    State protection: Maine coverage concerns an insurer-guaranteed annuity benefit that satisfies chapter 62.
    FDIC: FDIC coverage concerns money placed in a qualifying deposit account.
  • What system stands behind it
    State protection: The Maine Life & Health Insurance Guaranty Association provides statutory protection for covered obligations of failed member insurers.
    FDIC: Federally insured banks participate in the deposit-insurance system administered by the FDIC.
  • Coverage-limit basis
    State protection: Maine applies $250,000 per life and insurer, then a $300,000 cross-product aggregate.
    FDIC: The federal limit is organized by depositor capacity, account ownership, and bank.
  • Whether it applies to annuities
    State protection: A covered Maine annuity can qualify for state protection but never becomes an FDIC-insured product.
    FDIC: The federal program can insure an eligible bank deposit, not the Maine annuity.

Sources and last verified

Last verified: September 2, 2026