State annuity protection

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

Ohio generally provides up to $250,000 in protection for the present value of covered annuity benefits. OLHIGA may assist an impaired insurer during rehabilitation or conservation, while specified mandatory duties apply once a member insurer is ordered into liquidation with a finding of insolvency.

Ohio annuity protection at a glance

Annuity benefit limit
$250,000
Covered annuity obligations valued at present value, including eligible net cash surrender and net cash withdrawal values
Overall benefit cap
$300,000
The $300,000 general aggregate does not increase the separate $250,000 annuity-specific limit. A $500,000 aggregate applies when qualifying health-benefit-plan coverage is involved.
Who provides protection
Ohio Life and Health Insurance Guaranty Association
The Ohio Life and Health Insurance Guaranty Association provides statutory protection for covered obligations of impaired or insolvent member insurers and may continue, assume, reissue, reinsure, or pay covered obligations as authorized by Chapter 3956.
Insurer requirement
Member insurer
The issuing company must qualify as a member insurer under Ohio law, and a policy or contract issued in Ohio while the insurer lacked the required Ohio license or authority is excluded.

How the $250,000 limit works

Ohio generally provides up to $250,000 in the present value of covered annuity benefits with respect to one life, regardless of the number of policies or contracts, including eligible net cash surrender and withdrawal values.

Multiple annuity contracts with the same impaired or insolvent member insurer do not each receive a separate $250,000 limit. The statutory limit applies with respect to one life regardless of the number of policies or contracts.

Coverage limits are generally applied separately to each impaired or insolvent member insurer, with eligibility and residency determined under the circumstances applicable to each insurer.

The $300,000 general aggregate does not increase the separate $250,000 annuity-specific limit. A $500,000 aggregate applies when qualifying health-benefit-plan coverage is involved.

  • An eligible participant in a governmental retirement plan established under IRC sections 401, 403(b), or 457 and covered by an unallocated annuity contract may receive up to $250,000 in present-value annuity benefits. This amount is also subject to Ohio’s applicable $300,000 aggregate with respect to the individual.
  • For another covered unallocated-annuity category, Ohio permits as much as $5 million for one qualifying contract holder across all qualifying contracts held by that party.
  • 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. Rights acquired through a structured-settlement factoring transaction are excluded.

A $300,000 annuity example

Assume an Ohio resident owns an eligible annuity with a covered present value of $300,000 at one impaired or insolvent member insurer and has no other covered benefits with that insurer.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

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

The example assumes that the claimant, insurer, and contract satisfy Ohio’s eligibility requirements and that the stated amount represents covered contractual value. Actual protection may depend on whether the insurer is impaired or insolvent and on the remedy OLHIGA provides.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    Fixed annuities are generally covered up to Ohio’s $250,000 present-value annuity limit when the insurer, claimant, and contract satisfy Ohio’s eligibility requirements.

  • 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. When value is credited less frequently than annually, Ohio determines the value as though the earlier 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 Ohio’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 holder 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 holder bears market or index risk are generally excluded.

  • Unallocated annuity contract

    Limited situations

    Unallocated annuity contracts are covered only in specified circumstances. Eligible governmental-plan participants may receive up to $250,000 each in present-value annuity benefits. For another covered category, Ohio permits as much as $5 million for one qualifying contract holder across all of that holder’s contracts.

Who may qualify?

  • Residency is generally determined when the member insurer is determined to be impaired or insolvent under Ohio law.
  • For ordinary life insurance and annuity contracts, eligibility generally follows the residence of the legal owner. OLHIGA states that when a trust owns the policy or contract, it looks to the trustee’s state of residence.
  • A nonresident may qualify in limited circumstances when the issuing insurer is Ohio-domiciled and the person is not eligible for guaranty coverage in the state of residence because the insurer lacked the required license or authority there.
  • Ohio coordinates with other state guaranty associations so that an eligible person receives protection from only one association, using the residency and contract-specific rules in Chapter 3956.
  • The issuing company must qualify as a member insurer under Ohio law, and a policy or contract issued in Ohio while the insurer lacked the required Ohio license or authority is excluded.

What is not covered?

  • Portions of a policy or contract that are not guaranteed by the member insurer, or where the policy or contract holder bears the investment risk, are generally excluded.
  • Interest or crediting above Ohio’s statutory limits and certain uncredited or forfeitable index-linked amounts may be excluded. If index-linked value is credited less frequently than annually, Ohio calculates the value as though the earlier impairment or insolvency date were the contractual crediting date and treats that amount as credited and nonforfeitable.
  • A policy or contract issued in Ohio while the member insurer lacked the required license or certificate of authority to issue it is excluded.
  • Claims based on marketing materials, unauthorized side letters or riders, misrepresentations, and other extra-contractual obligations are generally excluded from OLHIGA protection.
  • OLHIGA is not liable for extra-contractual or punitive damages, attorney’s fees, penalties, or consequential or incidental damages beyond covered contractual obligations.

What happens when an insurer becomes impaired or insolvent?

  1. 1

    Financial distress or regulatory supervision may begin

    Financial distress or regulatory supervision alone does not create the mandatory duties that apply to an insolvent insurer under Chapter 3956.

  2. 2

    OLHIGA may assist during rehabilitation or conservation

    When a member insurer is placed under a court order of rehabilitation or conservation, it becomes an impaired insurer and OLHIGA may take specified actions to support covered contractual obligations. Access to payments or withdrawals may also be restricted during the proceeding.

  3. 3

    Court-approved moratoriums may temporarily restrict withdrawals

    Court-approved temporary moratoriums or liens may defer cash values, policy loans, or other withdrawal rights. Covered hardship claims may be handled under a procedure established by the rehabilitator or liquidator and approved by the receivership court.

  4. 4

    Specified OLHIGA duties apply after insolvency and liquidation

    When a member insurer is ordered into liquidation with a finding of insolvency, OLHIGA must provide protection through one of the remedies authorized by Chapter 3956.

How the guaranty system is financed

OLHIGA is funded primarily through assessments of member insurers, while assets attributable to covered policies and receivership recoveries may also help satisfy covered obligations.

Assessment allocation
Member insurers
Member-insurer assessments are allocated among Ohio’s statutory life insurance, annuity, unallocated-annuity, and health accounts or subaccounts based on applicable covered premiums and the assessment rules in Chapter 3956.
Annual assessment cap
2%
Annual assessment cap — 2%. For each applicable account or subaccount, total annual assessments generally cannot exceed 2% of the member insurer’s average annual Ohio premiums on covered business 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 generally offset 20% of a qualifying assessment against Ohio premium or franchise tax liability in each of the five calendar years following the fiscal biennium in which the assessment was paid. Eligible amounts that exceed the annual tax liability may carry forward.
Impairment and insolvency duties
Ohio distinguishes an impaired insurer from an insolvent insurer. OLHIGA may take specified actions for an impaired insurer under rehabilitation or conservation, while the statute imposes specified duties once a member insurer is ordered into liquidation with a finding of insolvency.

What to know before buying

  • Guaranty-association protection is limited and should not be treated as equivalent to the insurer’s own financial strength. During rehabilitation or insolvency proceedings, normal access to contract values may also be delayed or restricted.
  • Ohio bars use of association protection in sales, solicitation or purchase inducement while requiring an approved disclosure at or before policy delivery.

How state protection differs from FDIC insurance

  • What it covers
    State protection: OLHIGA provides statutory protection for covered obligations of impaired or insolvent member insurers, with different duties depending on the insurer’s legal status.
    FDIC: FDIC deposit coverage responds when an insured bank fails.
  • What system stands behind it
    State protection: OLHIGA is a statutory association of member insurers funded primarily through member assessments and regulated by the Ohio Superintendent of Insurance.
    FDIC: For eligible bank balances, the United States backs federal deposit insurance with its full faith and credit.
  • Coverage-limit basis
    State protection: The $250,000 annuity limit applies with respect to one life regardless of the number of contracts with the same insurer and is also subject to the applicable $300,000 aggregate with respect to the individual.
    FDIC: Deposit insurance applies its own depositor, bank and ownership-category framework.
  • Whether it applies to annuities
    State protection: Eligible annuity benefits may receive Chapter 3956 protection when the issuing member insurer becomes impaired or insolvent, subject to the different statutory powers and duties applicable at each stage.
    FDIC: Annuities are not FDIC-insured deposits.

Sources and last verified

Last verified: September 24, 2026