State annuity protection

Oregon Annuity Guaranty Protection: $250,000 Limit Explained

Oregon generally protects up to $250,000 in the present value of qualifying annuity benefits for one covered life at a failed member insurer.

Oregon annuity protection at a glance

Annuity benefit limit
$250,000
Present value of the covered annuity obligation
Overall benefit cap
$300,000
Oregon’s $300,000 combined ceiling sweeps in eligible settlement annuities, disability coverage, long-term care and other health obligations; covered major-medical claims can instead lift the total to $500,000.
Who provides protection
Oregon Life and Health Insurance Guaranty Association
OLHIGA may act when a member insurer is impaired and has specified duties after insolvency, coordinating with the receiver while applying Oregon’s statutory limits.
Insurer requirement
Member insurer
Coverage depends on the carrier’s Oregon association membership for the business line that produced the claimed obligation.

How the $250,000 limit works

For an Oregon life, present-value annuity protection stops at $250,000; adding another benefit can make the separate $300,000 aggregate relevant.

Contracts connected to one life at a single failed insurer share the annuity ceiling and the broader Oregon aggregate.

A separate failure receives a separate calculation, and the earliest judicial impairment-or-insolvency finding for that carrier supplies the residence date.

Oregon’s $300,000 combined ceiling sweeps in eligible settlement annuities, disability coverage, long-term care and other health obligations; covered major-medical claims can instead lift the total to $500,000.

  • Oregon assigns each eligible governmental-plan participant a $250,000 ceiling when an unallocated annuity funds the plan.
  • For a qualifying structured settlement, Oregon caps present-value benefits for the payee or beneficiary at $250,000.
  • Qualifying major-medical, hospital and surgical benefits can raise the otherwise applicable per-life aggregate to $500,000.

A $300,000 annuity example

Assume one Oregon life is covered by a qualifying $300,000 MYGA when a court first declares the carrier impaired or insolvent.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

Potential association protection reaches $250,000. The $50,000 balance can be filed in the policyholder class of the receivership, but the estate may not repay it in full.

The illustration assumes Oregon residence at the first impairment-or-insolvency order, one covered life and no competing benefit under the broader aggregate.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    A fixed annuity can qualify when its owner, issuer and guaranteed obligation meet chapter 734.

  • Fixed indexed annuity (FIA)

    Generally covered

    An FIA’s guaranteed value may qualify. For a crediting interval longer than a year, Oregon performs the nonforfeitable-value calculation as if the judicial failure date were the scheduled credit date.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    A MYGA ordinarily follows Oregon’s fixed-annuity treatment, but credited interest beyond the statutory rate thresholds can be removed.

  • Variable annuity

    Guaranteed portions may be covered

    Variable separate-account value is excluded to the extent the owner carries the investment risk.

  • Registered index-linked annuity (RILA)

    Contract-specific

    A RILA qualifies only for the carrier’s enforceable guarantees; owner-retained market exposure and investment losses remain outside the backstop.

  • Unallocated annuity contract

    Limited situations

    Participants in specified governmental plans under IRC §§ 401, 403(b) and 457 can receive a distinct $250,000 limit through a covered unallocated annuity.

Who may qualify?

  • Residence is measured when a court first enters an order determining the member insurer to be impaired or insolvent; that can occur before liquidation.
  • The statutory limit is framed per life. The Association’s consumer example describes ordinary annuity protection per contract owner, so unusual owner-annuitant structures need individual review.
  • For an out-of-state claimant, Oregon generally requires the carrier to be an Oregon member insurer, the residence jurisdiction to operate a comparable guaranty system, and that system to deny coverage because the carrier lacked the required authorization there.
  • Oregon coordinates its member-insurer backstop with the claimant’s home-state association without creating duplicate recovery.
  • Coverage depends on the carrier’s Oregon association membership for the business line that produced the claimed obligation.

What is not covered?

  • Benefits above the applicable annuity-specific or combined per-life limit remain possible policyholder claims against the receivership estate.
  • Market risk borne by the owner and obligations the member insurer did not guarantee are outside protection.
  • Some uncredited or forfeitable index-linked amounts and interest above Oregon’s statutory thresholds are excluded, subject to the longer-than-yearly crediting calculation.
  • Promotional statements, unauthorized contract add-ons, misleading representations and other claims outside the contract are excluded.
  • The backstop does not pay exemplary awards, legal fees, statutory sanctions, or indirect and incidental losses.

What happens after an insurer fails?

  1. 1

    The first impairment or insolvency order fixes residence

    A rehabilitation, conservation or liquidation order can establish which state association is responsible.

  2. 2

    Covered contract benefits are determined

    The receiver and OLHIGA coordinate while the Association applies its own statutory obligations and calculation limits.

  3. 3

    Eligibility and exclusions are applied

    Member status, claimant status, guarantees, crediting rules and exclusions are checked against chapter 734.

  4. 4

    The available remedy is arranged

    OLHIGA may continue, transfer or pay the protected obligation; an uncovered balance can proceed through the receivership claims process.

How the guaranty system is financed

Member assessments, assets attributable to covered policies and receivership recoveries support OLHIGA’s covered obligations.

Assessment allocation
Member insurers
Each account allocates calls using the member insurer’s covered Oregon premium for that account.
Annual assessment cap
Defined by state law
For each statutory account, Oregon generally caps a member insurer’s calendar-year assessment at 2% of its Oregon premiums on policies covered by that account.
Premium-tax treatment
State-specific rule
Oregon allows a qualifying assessment to offset corporate excise tax by 20% in each of five years, but no credit is available when the first tax year for the credit begins on or after January 1, 2028.
Assessment cap and tax sunset
The annual assessment ceiling is 2% per account. A qualifying tax offset is spread across five years but is unavailable if the first credit year begins on or after January 1, 2028.

What to know before buying

  • Oregon’s $250,000 annuity limit is a statutory backstop, not purchase-structuring guidance; contract terms and claimant facts still control.
  • Oregon bars insurers and agents from using guaranty protection in advertising, sales or solicitation.

How state protection differs from FDIC insurance

  • What it covers
    State protection: OLHIGA addresses covered insurance promises of an insolvent member.
    FDIC: The FDIC addresses eligible deposits held by a failed insured bank.
  • What system stands behind it
    State protection: Oregon insurers participate in the statutory association.
    FDIC: Federal law creates and governs the federal deposit insurer for participating banks.
  • Coverage-limit basis
    State protection: Present value is limited per life and can be reduced by a combined-benefit aggregate.
    FDIC: Deposits are grouped by depositor, institution and ownership category.
  • Whether it applies to annuities
    State protection: A qualifying Oregon annuity may receive chapter 734 protection.
    FDIC: An Oregon annuity is not FDIC-insured.

Sources and last verified

Last verified: September 17, 2026