State annuity protection

Oregon Annuity Guaranty Protection: $250,000 Limit Explained

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

Oregon annuity protection at a glance

Annuity benefit limit
$250,000
Present value of covered annuity benefits, including eligible net cash surrender and withdrawal values
Overall benefit cap
$300,000
Oregon generally caps covered benefits at $300,000 in the aggregate with respect to any one life. Qualifying basic hospital, medical and surgical insurance or major medical insurance can instead be covered up to a $500,000 aggregate.
Who provides protection
Oregon Life and Health Insurance Guaranty Association
The Oregon Life and Health Insurance Guaranty Association may assist when a member insurer is impaired and has broader statutory duties when a member insurer is insolvent, subject to director approval where required.
Insurer requirement
Member insurer
The policy or contract must be issued by an Oregon member insurer, and a policy issued in Oregon while the insurer lacked authority to issue it is excluded.

How the $250,000 limit works

Oregon generally limits the present value of covered annuity benefits, including eligible net cash surrender and withdrawal values, to $250,000 with respect to any one life.

The $250,000 annuity limit applies with respect to any one life regardless of the number of covered policies or contracts, subject to Oregon’s overall aggregate limit.

Coverage limits are applied to the obligations of each impaired or insolvent member insurer, with eligibility and residence determined under Oregon’s statutory coordination rules.

Oregon generally caps covered benefits at $300,000 in the aggregate with respect to any one life. Qualifying basic hospital, medical and surgical insurance or major medical insurance can instead be covered up to a $500,000 aggregate.

  • 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 resident owns an eligible fixed annuity with $300,000 in covered present-value benefits, including any eligible net cash surrender or withdrawal value, and has no other covered benefits that affect the aggregate limit.

Annuity value

$300,000

Potential protection

$250,000

Possible receivership claim

$50,000

In this example, the annuity-specific limit caps potential Oregon guaranty protection at $250,000.

This example assumes an eligible claimant, an eligible contract, one covered life and no other covered benefits that would affect the applicable aggregate limit.

Which annuities are covered?

  • Fixed annuity

    Generally covered

    A fixed annuity can qualify when the issuing insurer is a member insurer and the owner, contract and guaranteed obligation satisfy Oregon’s eligibility rules.

  • Fixed indexed annuity (FIA)

    Generally covered

    An FIA’s insurer-guaranteed value may qualify. If interest or changes in value are credited less frequently than annually, the earlier impairment or insolvency date is treated as the contractual crediting date for determining credited, nonforfeitable value.

  • Multi-year guaranteed annuity (MYGA)

    Generally covered

    A MYGA generally follows Oregon’s fixed deferred annuity treatment, subject to the $250,000 present-value limit and the statute’s restrictions on interest above specified thresholds.

  • Variable annuity

    Guaranteed portions may be covered

    Variable annuity value is excluded to the extent the owner bears the investment risk; only an enforceable insurer-guaranteed obligation can qualify.

  • Registered index-linked annuity (RILA)

    Contract-specific

    A RILA can qualify only for an enforceable insurer-guaranteed obligation. Owner-borne market or index risk and related investment losses remain outside the backstop.

  • Unallocated annuity contract

    Limited situations

    Unallocated annuity coverage is limited. Each eligible participant in a governmental retirement plan under IRC § 401, 403(b) or 457 can receive up to $250,000, and Oregon separately preserves a government-lottery carveout.

Who may qualify?

  • Residence is measured on the date a court first enters an order determining the member insurer to be impaired or insolvent; that date can precede a liquidation order.
  • The statute states its ordinary annuity limit with respect to one life. The Association’s FAQ describes the usual annuity limit per contract owner, so unusual owner-annuitant arrangements require individual review.
  • A nonresident can qualify only when the insurer is an Oregon member insurer, the person’s state has a comparable guaranty association, and that association denies coverage because the insurer lacked the authorization or license required by that state’s law.
  • Oregon coordinates with other state guaranty associations so that a person potentially covered in more than one state receives coverage from only one association.
  • The policy or contract must be issued by an Oregon member insurer, and a policy issued in Oregon while the insurer lacked authority to issue it is excluded.

What is not covered?

  • Benefits above the applicable annuity-specific or overall per-life limit are not guaranty benefits, although the excess may remain a claim against the receivership estate.
  • Obligations the member insurer did not guarantee, and portions for which the policyholder or contract owner bears the risk, are excluded.
  • Interest or index-linked value above Oregon’s statutory thresholds, and uncredited or forfeitable index-linked value, are excluded subject to the special rule for crediting less frequently than annually.
  • Claims based on marketing materials, unapproved side letters or riders, misrepresentations, bad faith or other extra-contractual theories are excluded.
  • Punitive or exemplary damages, attorney fees or costs, penalties, and consequential or incidental damages are excluded.

What happens after an insurer fails?

  1. Residence is fixed by the first court order

    Residence is determined on the date a court first orders the member insurer impaired or insolvent, which can be before liquidation.

  2. Covered benefits are identified

    The Association coordinates with the receiver and identifies the insurer’s covered contractual obligations.

  3. Eligibility and exclusions are reviewed

    Member-insurer status, claimant eligibility, guarantees, crediting rules, exclusions and statutory limits are applied.

  4. Covered obligations are continued, transferred or paid

    Depending on the proceeding and required approvals, the Association can guarantee, assume, reinsure, continue or pay covered obligations.

How the guaranty system is financed

OLHIGA is funded primarily through member-insurer assessments, together with assets and recoveries tied to covered policies.

Assessment allocation
Member insurers
Class B assessments are allocated separately by statutory account using covered Oregon premiums for that account over the three most recent available calendar years before the failure year.
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.
Government-lottery exception
Oregon generally excludes unallocated annuity contracts except those connected with specified governmental retirement plans or a government lottery. The statute’s separate $5 million cap applies to one owner of multiple nongroup life insurance policies, not to unallocated annuities.

What to know before buying

  • Guaranty protection is a statutory backstop, not a reason to buy an annuity. Eligibility depends on the issuing insurer, the claimant, the contract’s guarantees and the facts at the time of impairment or insolvency.
  • Oregon prohibits insurers and insurance producers from using the existence of the guaranty association for sales, solicitation or inducement to purchase covered insurance.

How state protection differs from FDIC insurance

  • What it covers
    State protection: The Oregon guaranty association provides statutory protection for covered obligations of impaired or insolvent member insurers.
    FDIC: Federal deposit insurance protects eligible deposits at failed insured banks.
  • What system stands behind it
    State protection: OLHIGA is funded primarily through assessments of member insurers.
    FDIC: Bank assessments support the federal deposit-insurance fund.
  • Coverage-limit basis
    State protection: Covered annuity benefits are generally limited to $250,000 in present value with respect to one life, subject to Oregon’s overall aggregate.
    FDIC: Federal deposit coverage is organized by depositor, insured bank and ownership category.
  • Whether it applies to annuities
    State protection: An eligible Oregon annuity may receive state guaranty association protection under Oregon insurance law.
    FDIC: Annuities are not FDIC-insured deposits.

Sources and last verified

Last verified: September 30, 2026