State annuity protection

New York Annuity Guaranty Protection: $500,000 Limit Explained

New York uses a statutory guaranty corporation and a $500,000 per-life aggregate across covered policies from one failed insurer.

New York annuity protection at a glance

Annuity benefit limit
$500,000
Covered policy benefits in the aggregate, including the guaranteed present value owed under an annuity contract.
Overall benefit cap
$500,000
The controlling consumer ceiling is $500,000 per life across all covered policy types issued by one failed company.
Who provides protection
Life Insurance Company Guaranty Corporation of New York
The Life and Health Insurance Company Guaranty Corporation of New York is a private statutory not-for-profit whose covered licensed insurers are members.
Insurer requirement
Member insurer
The issuing insurer must have been licensed in New York when the contract was issued or on the date of the liquidation or rehabilitation order.

How the $500,000 limit works

The corporation’s public guidance applies $500,000 per life in the aggregate across policy types, rather than adding a separate $500,000 annuity amount to other benefits.

Several annuities and other covered policies for one owner or life at the same failed insurer share the $500,000 aggregate.

A second member insurer supplies a distinct New York corporation limit analysis.

The controlling consumer ceiling is $500,000 per life across all covered policy types issued by one failed company.

A $550,000 annuity example

Assume a New York owner has one covered fixed annuity worth $550,000 at an insolvent member insurer and no competing policy benefit there.

Annuity value

$550,000

Potential protection

$500,000

Possible receivership claim

$50,000

The corporation applies its per-life aggregate to the full annuity value at that company.

The example assumes one owner and one life; separate ownership and unallocated contracts require their own analysis.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    A guaranteed fixed annuity can draw on the $500,000 aggregate.

  • Fixed indexed annuity (FIA)

    Generally covered

    New York can protect an insurer’s FIA promise, but it leaves investment or index risk assigned by the contract with the owner.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    MYGA guarantees may qualify, but a court may reduce clearly excessive guaranteed interest to an appropriate and reasonable rate.

  • Variable annuity

    Guaranteed portions may be covered

    New York excludes investment results assigned to the variable separate account while potentially recognizing an insurer-backed general-account promise.

  • Registered index-linked annuity (RILA)

    Contract-specific

    New York can cover an enforceable general-account promise in a RILA; it excludes the separate-account result carried by the owner.

  • Unallocated annuity contract

    Limited situations

    The corporation states a separate $1 million per-contract amount for covered unallocated group annuities and funding agreements.

Who may qualify?

  • A person may qualify as a New York resident if they live in New York when the liquidation or rehabilitation order is entered, or if they lived in New York when the covered policy was issued.
  • The owner and life associated with the policies determine the aggregate; separate spousal ownership can produce separate limits.
  • A former New York resident may receive coordinated participation when the contract was bought while resident and the insurer was licensed in New York.
  • The corporation coordinates with other state associations when residence and insurer domicile point to different jurisdictions.
  • The issuing insurer must have been licensed in New York when the contract was issued or on the date of the liquidation or rehabilitation order.

What is not covered?

  • Nonguaranteed benefits and policyholder-borne investment risk are excluded.
  • Self-insured employer plans are outside the corporation.
  • Contracts issued abroad for noncitizens and obligations payable outside U.S. dollars are excluded under the public guidance.
  • Interest a court finds clearly excessive is not protected.

What happens after an insurer fails?

  1. 1

    Receivership or liquidation

    A court liquidation order or superintendent’s impairment action brings the member insurer into the statutory process.

  2. 2

    Residence coordinated

    The corporation determines whether New York acts alone or with another state association.

  3. 3

    Aggregate allocated

    Covered annuity, life, and health obligations draw from the applicable $500,000 per-life amount.

  4. 4

    Estate claim continues

    Policy value beyond the corporation obligation remains subject to receiver distributions.

How the guaranty system is financed

The corporation assesses surviving member insurers to continue covered policies and pay eligible claims.

Assessment allocation
Member insurers
New York’s act allocates assessments among members and provides for tax-credit certificates for qualifying net assessments.
Annual assessment cap
Defined by state law
New York caps annual assessments for each account at 2% of a member insurer’s covered New York premiums received in the preceding calendar year.
Premium-tax treatment
State-specific rule
New York provides member insurers with tax-credit certificates generally based on 80% of qualifying net assessments, subject to the timing and cap rules in § 7712. This is not a policyholder tax benefit.
Corporation assessments and tax-credit certificates
The assessment credit belongs to member insurers; it is financing context, not additional policyholder coverage.

What to know before buying

  • Add every covered policy on the same life at one carrier before deciding how much of a new annuity fits under New York’s $500,000 aggregate.
  • New York Insurance Law § 7718 prohibits insurers, agents, brokers, and affiliates from using the guaranty corporation’s existence for sales, solicitation, or inducement.

How state protection differs from FDIC insurance

  • What it covers
    State protection: New York can protect guaranteed annuity obligations along with other eligible policy benefits.
    FDIC: Federal insurance covers qualifying deposit accounts instead of insurance-policy obligations.
  • What system stands behind it
    State protection: The Life and Health Insurance Company Guaranty Corporation of New York is an industry-funded statutory not-for-profit.
    FDIC: New York bank deposits covered by FDIC insurance have federal full-faith-and-credit backing.
  • Coverage-limit basis
    State protection: New York generally applies a $500,000 per-life aggregate across policy types at one failed insurer.
    FDIC: Deposit limits are calculated by depositor ownership category at each bank.
  • Whether it applies to annuities
    State protection: An eligible New York annuity may receive corporation protection, but the annuity receives no FDIC insurance.
    FDIC: The federal program protects an eligible bank deposit rather than that New York annuity.

Sources and last verified

Last verified: August 25, 2026